Attorney General Phil Weiser urges federal government agencies to provide additional financial relief on mortgage payments, protect stimulus check payments from garnishment

April 24, 2020 (DENVER, Colo.)— Attorney General Phil Weiser has joined with other state attorneys general in urging various federal government agencies to provide relief for people experiencing financial hardship during the COVID-19 pandemic.

“During this time of unprecedented financial challenges, Coloradans need additional relief in making payments on their federally-backed mortgages. They also need assurance that they will not have negative information on their credit reports for taking advantage of forbearance or alternate repayment opportunities, and that credit reporting agencies will immediately investigate and correct fraudulent or inaccurate information associated with their credit reports,” said Weiser. “By supporting our consumers and borrowers, we can ensure they are able to meet the challenges brought on by the COVID-19 pandemic and are ready to help our state move out of this health and economic crisis.”

Homeowners need grace in this time of crisis, which is why Weiser joined a coalition of 34 attorneys general asking that the federal government act to provide additional help to those whose loans are backed by Fannie Mae and Freddie Mac or other federal entities. As part of the CARES Act, the Federal Housing Finance Administration and the U.S. Department of Housing and Urban Development have already adopted streamlined processes for borrowers who have been affected by COVID-19 to enter into forbearance plans, which allow borrowers to pause mortgage payments for a limited period of time. Currently, once the forbearance period ends, borrowers are being asked to either repay the missed payments in a lump sum or enter a more permanent loss mitigation solution.

Because an unprecedented number of borrowers will need help at essentially the same time, the attorneys general are recommending moving the forborne (or missed) payments to the back of the loan term, allowing immediate relief for homeowners and reduce borrower confusion and concern while simultaneously limiting the strain on the mortgage servicing industry.

In a separate letter to the Consumer Financial Protection Bureau, Weiser and other attorneys general urged the bureau to withdraw its recent guidance that it will step back from enforcing certain requirements of the Fair Credit Reporting Act during the COVID-19 crisis. Protecting Americans’ credit reports is vital to ensuring strong participation in the economy. Consumer reporting agencies must now be even more vigilant in ensuring American consumers are protected against false and incorrect information on their credit reports that could prevent them from renting or buying a home, purchasing a new car, or opening a credit card account.

Another letter sent to the U.S. Department of Treasury urges immediate action to protect Americans’ CARES stimulus checks from garnishment by creditors or debt collectors.

“There is a risk that stimulus payments may be garnished by creditors or debt collectors, which would undermine the purpose of the CARES Act. These stimulus checks are intended to help hard-working Americans afloat and they should not be subject to garnishment. The federal Treasury should ensure Americans are able to keep that monetary relief,” concluded Weiser.

For consumer information related to COVID-19, go to coag.gov/coronavirus.

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Contact: Lawrence Pacheco

Director of Communications

Mobile: (720) 245-4689

lawrence.pacheco@coag.gov