CARES Act Updates for Homeowners During COVID-19

Posted by Skyseo Roundtable on May 12th, 2023

Updates for Renters and Homeowners in the COVID Era

If you live in New York and are behind on your rent or mortgage payments due to COVID related hardships, here are some things you should know.

If You Are a Renter

The Federal Eviction Moratorium* was created to help keep renters who were struggling to pay their rent due to COVID (illness, unemployment, etc.…) in their homes. This moratorium was scheduled to expire on June 24 but was extended first to July 31, the recently to October 3, 2021. The deadline was extended in hope that more help, via state and local Emergency Rental Assistance, could be distributed to those in need.

In New York State, the state-backed moratorium (COVID-19 Emergency Eviction and Foreclosure Prevention Act) expires on August 31, 2021. https://www.governor.ny.gov/news/governor-cuomo-signs-extension-covid-19-emergency-eviction-and-foreclosure-prevention-act-2020. New York also has a temporary banning on evictions against those with a pending rental assistance application.

*Note – this program only prevented eviction due to non-payment of rent. It didn’t forgive your debt (you still have to pay everything you owe) and it won’t prevent eviction for other reasons (destruction of property, dangerous behavior, breaking the agreements in the lease, etc.…).

If You Are a Homeowner

The CARES (Coronavirus, Aid, Relief, and Economic Security) Act helped keep homeowners with federally backed mortgages from being foreclosed upon during the worst of the COVID-19 pandemic. Since its inception, there have been a number of extensions. Unless otherwise announced, COVID-based mortgage foreclosure forbearance ends on September 30, 2021. To learn more about the basics of the CARES Act, check out our blog post  - https://www.ny-bankruptcy.com/covid-19-and-negotiations/

On June 28, 2021, the Consumer Financial Protection Bureau (CFPB) released a new program https://files.consumerfinance.gov/f/documents/cfpb_covid-mortgage-servicing-rule_executive-summary_2021-06.pdf to work with homeowners who are up to 120 days (four months) behind on their mortgages and who are in danger of foreclosure proceedings.

The new program, which will start on August 31 and expire on December 31, 2021, prevents federal lenders from beginning foreclosure proceedings unless the following rules have been met:

• You had already completed a loss mitigation application and the lender denied it as ineligible. There are number of rules that lenders must follow here. If they can prove that you haven’t acted in good faith, they will have the right to start the foreclosure process.
• If you have abandoned the property. If you have moved out of your home and it is no longer your primary residence, the foreclosure process can start.
• You’ve been ignoring all communications from your mortgage holder for over 90 days. If you haven’t reached out or responded to your lender’s letters or phone calls, they will be able start proceedings.

Who Gets Help / Who Doesn’t

While this new program is great news, not everyone in danger of foreclosure qualifies. Here’s what you need to know:

• The CFPB program only works on federally backed mortgages (HUD/FHA, USDA, VA, Fannie Mae, or Freddie Mac). If you have a private mortgage you will need to look for alternate options.
• This program is for your primary residence. It will not protect you if you are behind on the mortgage of second home.

Reaching Out for Help

Both New York State and Federal rules are complex and confusing. If you’ve been dealing with economic hardship due to the COVID-19 pandemic, and you are afraid of losing your home, it’s time to reach out for help. There are a number of ways the right debt lawyer can guide you through the various rules and regulations that seem to be changing almost every day.

If you live in New York, and you’d like to talk directly to a compassionate, knowledgeable, human being, reach out to New York debt attorney Ronald D. Weiss, P.C. for a free consultation. He can tell you which state and federal programs may allow you to keep your home and can help you get the process started. Call 631-271-3737 and take the first step to a fresh start.