Posted and up-to-date as of 10/1/2021
If you can't make your mortgage payment because of the COVID-19 emergency, there is some good news:
- Many mortgage lenders are offering special programs to borrowers who can't make their mortgage payments because of the COVID-19 emergency.
- Contact your lender directly to talk over your options during this time.
- The most common mortgage payment relief available is called “forbearance.” This means you don’t have to pay your mortgage now, but when the forbearance period ends you will have to either make up those missed payments or agree to some other arrangement with your lender. The missed payments are not forgiven. Do not request a forbearance if you are still able to make your mortgage payments.
- You cannot lose your home until a judge issues a judgment of foreclosure.
- If you got behind on your mortgage after November 1, 2019, there’s a good chance your lender will not start a foreclosure until at least January 2022. But only if you stay in contact with your lender.
I can’t pay my mortgage, what should I do?
Contact your lender! Maintain communication with your lender! Don’t ignore correspondence!
- Most lenders already have programs for people facing financial hardship that may be able to help you now.
- Many lenders are offering special programs to respond to hardship caused by the COVID-19 crisis.
- The most common kind of help being offered by lenders is called a temporary payment "forbearance." Read more about “mortgage payment forbearance” below for important information and guidance.
- Do not request a forbearance if you can afford to pay your monthly mortgage bill. A forbearance does not forgive payments - those skipped payments will all be due after the forbearance ends.
- Contacting your lender and maintaining communication is the only way to know about these programs and take advantage of them.
- A new federal rule prohibits most lenders from starting foreclosures on primary residences until January 2022. But this rule only applies if you got behind on payments after November 1, 2019 AND you keep in regular contact with your lender and don’t ignore them.
- The federal government’s Consumer Financial Protection Bureau has good advice on mortgage forbearances.
Will the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed by the United States Congress offer me any help with my mortgage payment?
Under the CARES Act, some loans (over half in the country) are eligible for payment “forbearance” for up to 12 months. But there are some things you should know:
- Borrowers have to request a forbearance - it won't be granted automatically by your lender.
- Contact your lender to see what programs you are eligible for. Any kind of help or relief will only be given to those who request it.
- Understand that “forbearance” is not forgiveness. Forbearance just delays or pauses your payments. You and your lender will have to make a plan for how you will make up for missed payments.
- Do not request a forbearance if you can afford to make all of your monthly mortgage payments.
Read below for more information.
Am I eligible for Forbearance under the CARES Act?
Not all loans are eligible - only “federally backed loans”
The parts of the CARES Act meant to help borrowers, which we will cover here, only apply to “federally backed loans” on 1-4 unit homes. For some loans, it is easy to tell if the loan is “federally backed.” For others, it can be more difficult. Your lender or loan servicer, which is the company that sends your monthly statements, should always be able and willing to tell you and to help you in asking for payment relief.
These are the “federally backed” loans that are covered by the CARES Act, along with information on how to tell if your loan falls into one of these categories:
- Fannie Mae Loans: you may not know if your loan is owned or backed by Fannie Mae. You can check if Fannie Mae has your loan at this website.
- Freddie Mac Loans: you may not know if your loan is owned or backed by Freddie Mac. You can check if Freddie Mac has your loan at this website
- FHA Loans: these are loans insured by the Fair Housing Administration, including standard mortgages and Home Equity Conversion Mortgages (i.e., reverses mortgages). Check your original loan documents for an “FHA Case Number” or check your monthly statement to see if you pay an FHA mortgage insurance premium. Some FHA loans that were previously in default could have had their FHA insurance stripped. Call your lender to see if your loan is an FHA loan.
- USDA Direct Loans: the monthly statements for these loans come directly from USDA Rural Housing Service.
- USDA Guaranteed Loans: your monthly statements will come from a private servicer, not USDA. Check your loan closing documents for records showing USDA guarantees the loan, or ask your servicer.
- VA Loans: these are loans guaranteed by the Veterans Administration. Your original loan documents will identify the loan as a VA loan.
If your loan is not a “federally backed” loan, your lender will still probably offer some payment relief options if you cannot make payments because of the COVID-19 crisis. Contact your lender to discuss your options.
How do I qualify for forbearance payment relief?
To qualify for payment forbearance under the CARES Act:
- You must own a 1-4 unit home (this includes single-family homes) with a federally backed mortgage loan.
- You must be experiencing a financial hardship that is caused directly, or indirectly, by the COVID-19 crisis. For example: you lost income because of reduced work hours or losing your job because your employer was forced to close or downsize; or you cannot work because you are sick, caring for a sick relative, or ordered to stay home.
- You must request forbearance from your lender and explain your hardship. The request can be in writing or over the phone.
- You do NOT have to be in default or behind on your payments to request forbearance.
When can I request a forbearance under the CARES Act?
There are different deadlines to make your first request to begin forbearance under the CARES Act depending on who owns or insures your loan:
- FHA, VA, and USDA insured or owned loans: you must make your first request for a forbearance before the expiration of the COVID-19 National Emergency (date is not yet known).
- Fannie Mae, and Freddie Mac owned loans: at this time there is no deadline for requesting your first forbearance.
Read the section above to help you figure you if one of these agencies owns or insures your loan.
After you are in a forbearance, you can extend your forbearance period for up to one year even after these deadlines.
What is a “forbearance” of my mortgage payments under the CARES Act?
A “forbearance” means your lender gives you permission to not make your monthly payments for a set time period. During this forbearance period, your lender will not treat your loan as “delinquent” or “in default.” Your lender will not charge you late fees or report your loan as delinquent to credit reporting agencies.
But, a payment forbearance is not payment forgiveness or payment deferment. When your forbearance period ends, all the payments you missed will be immediately due and payable. This is true unless your lender agrees to modify your loan or offers a repayment plan for you to pay off the missed payments over time, in addition to your regular monthly payments. For this reason, you should not request a forbearance if you can afford to make your loan payments.
If you can afford to, and your lender allows, make partial payments during your forbearance period to lower the amount you will owe when it ends.
If you request a forbearance under the CARES Act and affirm to your lender that you are experiencing a COVID-19 related hardship, you will be granted a forbearance for up to 180-days.
- If you need to extend your forbearance period, make sure to tell your lender before your original forbearance period ends.
- You can extend your forbearance for up to one year by simply requesting it. Some home owners may be able to extend it for more than one year.
- You can end your forbearance period any time by requesting it.
What will happen at the end of my forbearance period?
A couple months before your forbearance period ends, you will have to make a plan to deal with the missed payments. One option is to “reinstate” the loan by making a lump sum payment totaling all of the payments you missed during the forbearance. Most people will not be able to reinstate and your lender does not expect you to be able to do this. If you cannot reinstate, you will need to agree to a different plan with your lender. Contact your lender before your forbearance period ends to discuss your options.
Your lender may consider you for a repayment plan or a loan modification. For either option, you may need to give your lender information and documents about your current income and finances. Be prepared to give your lender documentation like:
- pay stubs,
- bank statements, and
- benefits award letters.
Remember, the forbearance being offered to those affected by COVID-19 is not free money. Do not request a forbearance if you can afford to make your payments. If your lender allows, try to make partial payments during the forbearance to lower the amount you will owe when forbearance ends.
This website will be updated with more guidance on what do to when your forbearance ends. Check back soon!
Can my lender bring a foreclosure against me now?
Some lenders may now start and complete foreclosures for some loans. The foreclosure moratorium that was created by the CARES act expired on July 31, 2021.
But, for homeowners with the following circumstances, your lender is not supposed to start a foreclosure against you until after December 31 ,2021:
- Your mortgage is on your primary residence,
- Your loan was current on November 1, 2019,
- You reach out to your lender every 90 days to explain your situation and discuss options,
- Your lender has not reviewed a complete loss mitigation application since you got behind,
- Your mortgage loan is with a lender / servicer with more than 5,000 loans (most lenders / servicers have more than this).
These rules were made to encourage homeowners and lenders to work together to get loans back on track. So don’t ignore calls and letters about your mortgage. CONTACT YOUR LENDER OR SERVICER!
I have a foreclosure case pending in a Maine state court, what will happen, and what should I do?
Some court dates and deadlines have been changed. All Maine foreclosure hearings and mediations that were scheduled between March 18th and August 3rd, 2020 were cancelled and will be rescheduled. Check your mail for a new court date. Be on alert for letters from the Court! No matter what the general court date changes and cancellations outlined below are, the Court will tell you individually if your court date is being canceled or rescheduled.
- Staying on top of your case is very important with all the uncertainty about the COVID-19 crisis.
- The courts may schedule conferences to talk about the timeline or the status of your case at any time. Pay close attention to any mail you get from the court!
- If you were previously served with a foreclosure complaint and have not yet filed a response with the court, take this time to mail your Response to the Court and send a copy to the lawyer for your lender.
I am currently in foreclosure mediation in Maine, what happens now?
- If you have begun the process of applying for a loan modification or other workout option, continue that process as best you can. This includes gathering and submitting requested documentation, and responding to any requests from your lender for additional documentation or information.
- If a future mediation session was scheduled between March 30th, 2020 and August 3rd, 2020, it will be rescheduled.
- If you believe you require an additional mediation but none was scheduled, write a letter to the Court requesting that another mediation be scheduled and explain why you need it.
If you need help, contact the Maine Foreclosure Prevention Hotline: 1-888-664-2569.
I have a foreclosure case pending in a Maine Federal District Court, what will happen, and what should I do?
Be on alert for letters from the Court! No matter what the general court date changes and cancelations outlined below are, the Court will tell you individually if your court date is being canceled or rescheduled. Staying on top of your case is very important with all the uncertainty about the COVID-19 crisis.
Some court dates and deadlines have been changed:
- All foreclosure hearings and mediations previously scheduled between March 19 and April 30, 2020 are cancelled and will be rescheduled. Check your mail for a new date.
- If you were recently served with a foreclosure complaint and have not yet filed a response with the court, take this time to mail an Answer to the Court and send a copy to the lawyer for your lender.
- Pay attention to your mail. If the court sends you a date, you must attend. You should reach out to the clerk's office about attending by phone or video.
- For the court in Portland: (207) 780-3356
- For the court in Bangor: (207) 945-0575
- You must wear a mask in court.
- You should expect to be screened for COVID-19 before going into the court. Read about Maine Courts COVID-19 Entry Screening
A court has already issued a Judgment allowing the lender to foreclose, what should I do?
- If you feel you have the ability and want to make a mortgage payment, contact your lender to discuss possible workout options.
- Home prices in Maine have increased dramatically. After the court issues a foreclosure judgment, you have 90 days to sell your home if it will pay off your remaining debt. And you can keep any remaining proceeds of the sale.
- If you are struggling to find replacement housing, you should file a written request with the Court to “extend the redemption period” to a future date that will give you time to find replacement housing. The 'redemption period' is the time after a foreclosure judgment—usually 90 days—when you can stay in your home and, if possible, pay off your mortgage.
- The written request should explain the risks to you if you cannot find replacement housing during this public health crisis.
- Ask the attorney for the lender if they will agree to this request. Getting them to agree will make it more likely the Court will grant your request.
- Enlarging the redemption period will push out any foreclosure sale until after the redemption period expires.
Where can I get help?
If you need assistance, contact the Maine Foreclosure Prevention Hotline: 1-888-664-2569 to be connected with a housing counselor.
If you have a pending foreclosure case or other concerns about your ability to pay your mortgage, you can use our Foreclosure Prevention Toolkit and the resources listed there.