In our continuing effort to keep our clients and business community informed about the recent developments resulting from the COVID-19 pandemic, here is a more in-depth discussion of some of the recent relief provided to individuals and businesses by the U.S. government.
Mortgage Relief for Homeowners
Servicers of federally backed mortgages are required to postpone mortgage payments if requested by the borrower, provided the borrower affirms financial hardship due to COVID-19. The postponement must be granted for up to 180 days and extended for an additional period of up to 180 days if requested by the borrower. During the mortgage forbearance period, interest will still accrue, but additional fees, penalties or extra interest cannot be added to the mortgage balance.
Servicers of federally backed mortgage loans are prevented from initiating any foreclosure process for at least 60 days beginning on March 18, 2020.
Renters Relief from Eviction
For 120 days after the CARES Act date of enactment (March 27, 2020), landlords with mortgages backed by the U.S. Department of Housing and Urban Development (HUD), Fannie Mae, Freddie Mac, and other federal entities cannot pursue eviction of their tenants. Landlords also can't charge any fees or penalties related to nonpayment of rent. No protection is currently being provided for renters who live in buildings that do not have a federally backed mortgage.
The CARES Act requires reports to credit reporting agencies to show accounts as “current” even when there has been an account forbearance or agreement to modify payments on an account impacted by COVID-19. This will apply from January 31, 2020 through at least 120 days after the enactment of the Act.
About the Author - Jan Forgue is a senior manager in the assurance group. In addition to planning and managing client attest engagements, she performs firm quality control responsibilities including engagement quality control reviews, coordination of annual monitoring and inspection procedures, update of the firm's quality control policies and practice aids, and provides assistance with complex accounting issues. She assists in expansion of the firm's attest practice, including peer review and accounting and attest consulting services. She is considered a subject matter expert in the employee benefit plan area. She also assists in developing staff through leading in-house training and identifying external CPE opportunities, on-the-job-training, and technical research skills.