OIG • OIG-2020-004 • July 27, 2020 10
effects from the COVID-19 pandemic.
4
Section 4022 of the CARES Act, among other things,
gives single-family homeowners experiencing financial hardship due to the COVID-19
pandemic the right to forbearance from making mortgage payments on loans owned or
securitized by Fannie Mae and Freddie Mac, regardless of delinquency status.
5
Section
4022(b)(1) sets forth the process to be used by a homeowner seeking forbearance for financial
hardship due to COVID-19: (1) submission of a request to the homeowner’s servicer, and
(2) affirmation that the homeowner is experiencing a financial hardship during the COVID-19
emergency. Upon receipt of such a request by a homeowner and attestation of financial
hardship, Section 4022(c)(1) directs that the servicer “shall” grant the request without
obtaining any additional documentation. The statute explicitly provides that during the period
of forbearance “no fees, penalties, or interest (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)” can be assessed on the borrower. Under Section 4022(b)(2) of the
CARES Act, forbearance “shall be granted for up to 180 days, and shall be extended for an
additional 180 days upon request by the borrower . . ..”
FHFA and the Enterprises have provided the public with information about forbearance on
their websites. FHFA’s COVID-19 information page states that, “If your ability to pay your
mortgage is impacted, and your loan is owned by Fannie Mae or Freddie Mac . . . you may
be eligible to delay making your monthly mortgage payments for a temporary period . . ..”
6
The website also provides information about end-of-forbearance repayment options. Fannie
Mae’s website, “Here to Help,” contains fact sheets, videos, and other resources for
homeowners.
7
Among other things, the website explains forbearance and repayment options
after forbearance. Freddie Mac operates a consumer website, “MyHome by Freddie Mac,”
4
In response to the spread of COVID-19 in the United States, President Trump issued a declaration on
March 13, 2020, that the outbreak constituted a national emergency. The COVID-19 emergency, and federal
and state responses to the emergency to protect health and safety, have had wide-ranging effects on the
national economy, the housing finance industry, and on homeowners.
5
Section 4022(b)(1). Section 4022 is part of Title IV, Subtitle A of the CARES Act, the Coronavirus
Economic Stabilization Act of 2020. The CARES Act provides forbearance for up to one year to qualifying
residential mortgage borrowers with “federally backed mortgage loans.” This term is defined in the Act to
include residential mortgage loans purchased by Fannie Mae and Freddie Mac. For the purposes of this report,
we refer to such borrowers as “homeowners.”
6
FHFA, COVID-19 Information and Resources (June 17, 2020) (online at
www.fhfa.gov/Homeownersbuyer/MortgageAssistance/Pages/Coronavirus-Assistance-Information.aspx
).
FHFA also launched a joint housing assistance website with the Consumer Financial Protection Bureau
(CFPB) and the U.S. Department of Housing and Urban Development (HUD). See CFPB, FHFA, and HUD,
Mortgage and housing assistance during the coronavirus national emergency (updated July 1, 2020) (online at
http://cfpb.gov/housing). This website provides information on CARES Act mortgage relief, look-up tools to
help homeowners determine if their mortgage is federally backed, and resources for additional help.
7
Fannie Mae, Here to Help (accessed June 26, 2020) (online at
www.fanniemae.com/heretohelp/kyo/index.html
).