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12.3.3.4 The Length of CARES Act Forbearance

Significant Law Change

The CARES Act provides for up to 360 days of forbearance for borrowers attesting to a COVID-19 hardship. Under the Act the servicer shall grant up to 180 days of forbearance and then extend to an additional period of up to 180 days “at the borrower’s request.”40 The borrower may elect to shorten periods of forbearance.

A critical issue in the aftermath of the CARES Act was whether the servicer could offer periods of forbearance that are shorter than 180 days, and if so, whether that prevents borrowers from obtaining the full 360 days of forbearance. The Conference of State Bank Supervisors and Consumer Financial Protection Bureau, in interpreting the CARES Act, stated the following:

Because the statutory language qualifies the period as “up to” 180 days, servicers can grant forbearance in separate, shorter increments than the 180-day period with borrower consent, but must extend those shorter periods unless agreed by the borrower with no further borrower attestation required.41

Borrower advocates, however, seeking a full year of forbearance should raise this guidance. In addition, each agency has developed their individual guidelines for CARES Act forbearance, which advocates should review. As described below, borrowers may be entitled to more than a year of forbearance if they need it, depending on when they started forbearance. These extended forbearance provisions, however, are not granted pursuant to the CARES Act.

Footnotes