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In March 2020 Congress passed the Coronavirus Aid, Relief, and Economic Security Act”, also known as the CARES ACT. Among many other provisions, the cares act provides for mortgage relief.

If you have a mortgage that is owned by Fannie Mae, Freddie Mac or guaranteed by other federal agencies such as FHA and the Department of Veteran Affairs, you have certain protections available.

Under the CARES ACT mortgage servicers are required to provide 180 days of mortgage forbearance, with the option to extend for an additional 180 days, to homeowners that are impacted by COVID-19 financial hardships.

There is a 60-day moratorium on foreclosure proceedings, foreclosure related evictions and foreclosure sales for federally back mortgages.

This should not impact your credit during COVID-19. Lenders who furnish information to credit reporting agencies must report a consumer’s obligation or account as current during the forbearance.

While most mortgages in Connecticut are federally backed or owned, there may be relief for homeowners with portfolio mortgages, meaning those owned by the individual banks or credit unions and insured by a federal agency.

On March 31, 2020, Governor Lamont announced an agreement between the State of Connecticut and more than 50 credit unions and banks in Connecticut to provide similar relief to homeowners with portfolio mortgages. Again, this is for homeowners who have been financially impacted by COVID-19. Among the provisions is a 90 day grace period for mortgage payments, and relief from fees and charges for the 90 days. There will be no new foreclosures for 60 days. While these lenders may report a forbearance to credit reporting agencies, there should be No credit score change for seeking the grace period.

You can find more information, including a list of banks cooperating with the State of Connecticut at the Department of Banking’s website or contact Ron Bellenot at the Law Offices of Bellenot & Boufford, LLC if you have any additional questions. Ron is happy to give you a free phone consultation to determine if there are other available programs or means of managing your mortgage in difficult financial times.

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