Foreclosure Protections and Mortgage Relief for Texas Homeowners
Here are a couple useful federal guides to mortgage assistance options and foreclosure protections enacted in response to the COVID-19 pandemic and its financial impacts on households. The following is a summary of some of these federal protections:
- Forbearance rights
Under the CARES Act, borrowers with certain types of federally-backed or federally-funded mortgages on their single-family homes have been eligible to request a forbearance from payments. No late fees, interest, or penalties accrue during the forbearance period beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract. Here’s more information about the protections. The CARES Act did not include a date on when these protections expire so individual federal agencies have issued ongoing guidance and extensions of their forbearance policies.
- On September 27, 2021, the Federal Housing Administration announced new and extended forebearance options for homeowners with FHA home loans who are struggling to make their mortgage payments because of the COVID-19 pandemic. The announcement includes a useful chart to guide borrowers on identifying what types of forebearance options are availble to them.
- Here is information on how long forbearance periods last and options for extensions.
- Here’s a site with links to the different federal loan programs and their forbearance policies and how to find out if your loan is covered by one of these programs.
- Additional protections: In June 2021, the Consumer Financial Protection Bureau finalized a new rule that establishes several safeguards for homeowners before their loan servicer can start the foreclosure process. The rule goes into effect on August 31, 2021. In general, most mortgage servicers cannot start the foreclosure process against a homeowner who is delinquent on their mortgage before January 1, 2022, without first reaching out to the homeowner and evaluating options to help avoid foreclosure, through what is called a complete loss mitigation evaluation. The CFPD has also created a streamlined loan modification process for homeowners who are delinquent on their mortgages.
If you know of any updates that should added to this list, please email CommunityAssistanceProject@law.utexas.edu.