The CARES Act, which became law on March 27, 2020, imposes
important restrictions on foreclosure activity by servicers of
federally-backed mortgage loans.
It also grants expansive rights to borrowers to seek forbearance
of their loans for the next 12 months. Here are the key
takeaways:
Foreclosure Moratorium
The foreclosure moratorium applies to all federally-back mortgage
loans securing residential real property. These include
mortgages and deeds of trust purchased by Fannie Mae and Freddie
Mac, insured by HUD, the VA, or the USDA, or directly made by the
USDA.
The moratorium runs to May 18, 2020. During that time, a
servicer of a federally-back mortgage loan cannot (1) initiate a
judicial or non-judicial foreclosure, (2) notice and conduct a
foreclosure hearing, or (3) conduct a foreclosure sale or execute a
foreclosure-related eviction. The Act does not exempt
foreclosure proceedings commenced before its enactment.
