What Mortgage Relief and Moratoriums Mean for Homeowners

Jun 19, 2020

Many people in different states are concerned about how they will make rent and mortgage payments amid the financial impact of COVID-19. Some people have thoughts such as how to sell my house fast running through their minds. However the state and federal governments announced various plans that are aimed…

Written By Offer Hut

Many people in different states are concerned about how they will make rent and mortgage payments amid the financial impact of COVID-19. Some people have thoughts such as how to sell my house fast running through their minds. However the state and federal governments announced various plans that are aimed at helping struggling homeowners during the pandemic. This guide includes everything you need to know about the moratoriums and mortgage relief issued by the government.


First things first

Understand that you should pay your mortgage should you be in a position to do so. However, contact your mortgage service provider if you can make partial payments or if you can’t make the payments. If you don’t face an immediate issue, don’t contact your mortgage servicer since they are getting a lot of calls and they have to prioritize. Calls include people looking to put up their houses for sell in Washington, Seattle, and other states.


The new federal law dubbed CARES (Coronavirus Aid, Relief, and Economic Security) which especially puts two protective measures for homeowners that have federally backed up mortgages.


1. Foreclosure moratorium

2. Forbearance right for homeowners going through financial hardships caused by COVID-19 hardships


However, those without federally backed mortgages may still get relief options from their state or mortgage servicer.


In this guide, we will take a look into everything you need to know and all the available option that you have. Later on we will explain how your servicer or lender can help you during this difficult time. This is, therefore not a good time to sell your house since everyone is bracing for hard times.


Mortgage forbearance

Forbearance is the situation whereby your lender or mortgage servicer allows reducing or pausing of your payments for a limited period. However, forbearance will not erase what you owe but rather you will have to make these payments in the future. You must, therefore, resume paying your mortgage immediately you get sufficient income to do so.


There are different forbearance options available depending on the type of loan that you have. Ensure your mortgage servicer takes you through each of your options to help you decide on which best suits your situation.


Moratoriums stop or suspend foreclosure

Foreclosure entails the lender taking back property when a homeowner fails to make the necessary mortgage payments. The foreclosure process varies from state to state and you need to research your state’s process. Just like houses for sale in Seattle have different procedures than those in Washington, so do the foreclosure processes.


Options you qualify for

Let’s start by understanding who backs or owns your mortgage will determine the mortgage relief options that you get. The first step, therefore, has to be determining your mortgage servicer. The company that receives your mortgage payments every month is your mortgage servicer.


If you can’t remember, or don’t know, your mortgage servicer, then you need to look through your mortgage statement for contact details.


The next step is figuring out whether your mortgage is federally owned or backed by any federal agencies or entities listed below. Your mortgage servicer is obligated to provide you with the address, name, and telephone number of whoever owns your loan.


    • U.S. Department of Housing and Urban Development


    • U.S. Department of Agriculture


    • Federal Housing Administration


    • Fannie Mae


    • Freddie Mac


    • U.S. Department of Veterans Affairs



It is estimated that almost half the mortgages nationally are backed or owned by Freddie Mac or Freddie Mae. Most Washington houses are equally backed by Fannie Mae and Freddie Mac


Relief options under the CARES Act

Should your mortgage be federally owned or backed, the CARES Act offers you two mortgage relief options:


1. As of March 18, 2020 your loan servicer or lender may not foreclose your property for 60 days from the date given. The CARES Act prohibits services and lenders from starting a non-judicial or judicial foreclosure against you, or finalizing sale or judgment, during the stipulated period.


2. Secondly, you have the right to forbearance for 180 days should you experience financial hardships caused by the Corona Virus. You also get to request one extension of another 180 days. However, you have to contact your mortgage servicer or lender to request forbearance. The good news is that there is no additional interest, fees, or penalties. You equally need no additional documentation other than the claim of financial hardships that is pandemic related.


Mortgages backed by Freddie Mac and Fannie Mae

In addition to getting forbearance and foreclosure moratorium, if your house is backed by Freddie Mac or Fannie Mac, you get the following benefits.


    • There are no late fees


    • Delinquencies won’t be reported to the credit reporting institutions


    • The foreclosure will be suspended.



What if your mortgage isn’t federally backed?

The good news, should your mortgage not be federally backed, is that many states have started considering and implementing different mortgage relief options including foreclosure suspensions and additional help. You need to check your state’s official government website for more details. Since there are a lot of houses for sale in Seattle, and so many other states, you could equally put up your house on sale meanwhile.


How to request mortgage relief and forbearance


Call your servicer

Granted, you will wait on the line because the mortgage services are getting numerous calls. Check their website to determine all the information they might need and ask all the relevant questions that you have. Your account number will be requested. You will have to explain the following:


    • Why you can’t make payments


    • Whether it is permanent or temporary


    • Details about expenses, income, and other assets


    • If you are a service member with PCS (Permanent Change of Station)



Ensure you ask the options available to you, whether there are loan modifications, forbearance, or other options, and if you can waiver late fees.


Get it in writing

Once you get mortgage relief or moratoriums, ask your mortgage servicer to give you written documentation. Written documentation will have a detailed confirmation of your agreement and the terms agreed. Some forbearance allows you to make additional payments after your mortgage periods while others require you to make a one-time payment of all the missed payments.



Mortgage relief and moratoriums are aimed at helping homeowners affected by the COVID-19 pandemic. Ensure you follow the steps provided to get mortgage relief or moratoriums today. However, you must pay the mortgage should you be in a position to do so. Remember, as stated earlier, you will still pay the balances sometime in the future. You should equally be prepared for long wait times when contacting your mortgage servicer and don’t forget to ask for written documentation. Stop thinking of how to sell your house and apply for mortgage relief and moratoriums today.


What our clients are saying

Sarah D. (Durham, NC)

“The Sell Triangle team really knows their stuff. As a seller in a difficult situation, I was able to not only get a great cash offer for my home, but we were able to close in just a few weeks! I would highly recommend this company for anyone trying to sell their house fast.”

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