New House Bill on Mortgage Forbearances
Wednesday, April 29, 2020
H.R. 6632, the Save Our Homes Act, was introduced yesterday by Rep. Darren Soto (D-FL).
This bill would supplement section 4022 of the CARES act which mandates that Borrowers who have federally backed mortgages and are experiencing financial hardship during the COVID-19 outbreak may request a forbearance, up to180 days, on their mortgage payments, with no additional fees or penalties. The legislation would mandate that the length of the mortgage be extended to make up the forbearance payments, which would therefore disallow the use of balloon payments.
On Monday FHFA issued a statement reiterating that “borrowers in forbearance with a Fannie Mae or Freddie Mac-backed mortgage are not required to repay the missed payments in one lump sum." HR 6632 would codify this regulatory policy into statute.
DCUC believes this bill’s language will be under consideration for inclusion into the House draft of whatever Phase 4 legislation emerges.
DCUC has voiced its concerns on the impact of 6- to 12-month forbearances on our nation’s credit unions and the negative impact on liquidity as more borrowers (and renters) request relief under the CARES act. Without liquidity, other loans necessary to rebuild our economy are curtailed or eliminated. There is no language in the bill that addresses these concerns.
DCUC will continue to monitor this and other developments as they occur.