MBA, Trade Groups Ask Federal Agencies for Clarity on CARES Act Forbearance
The Mortgage Bankers Association, the American Bankers Association and the Housing Policy Council on Thursday asked federal agencies to issue guidance establishing a consistent timeframe for CARES Act forbearance under their respective programs.
In the letter to the Federal Housing Finance Agency, Fannie Mae; Freddie Mac; HUD; The Department of Veterans Affairs; and the Department of Agriculture, MBA and the trade groups said clear guidance is needed from each agency for which CARES Act forbearance assistance is available, until the end of the National Emergency as declared by the President last March.
“As you know, servicers are actively engaged in the delivery of payment relief to all borrowers in need as a result of the pandemic,” the letter said. “Critical to this work is consistency in messaging and treatment of borrowers in distress.”
Section 4022 of the CARES Act directs servicers to provide, during the covered period, payment forbearance for borrowers experiencing a COVID-related financial hardship, upon a borrower’s request. The letter points out Section 4022 does not define the term “covered period,” an omission that has led to servicer and borrower confusion over the extent of the effective period for initiation of CARES Act forbearances.
“The need for continued access to CARES Act forbearance past the end of this calendar year is evident from the growing infection counts and associated economic disruption across the country,” the letter said. “As such, we urge the agencies to publicly announce that the COVID-19 forbearance programs will continue to be available through the National Emergency period, allowing sufficient time for borrowers to access this assistance and servicers to plan for continued program delivery over the coming months.”