Included in the 2 trillion dollar Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a provision that allows homeowners with government guaranteed loans (Fannie Mae and Freddie Mac) to request up to 12 months of mortgage payment forbearance.
Under the CARES Act a homeowner may ask for 6 months of loan payment forbearance that is renewable for another 6 months. In other words, a qualified homeowner can go an entire year without making a single mortgage payment.
What exactly is a mortgage payment forbearance?
Well, it simply means that a payment does not have to be made presently, but eventually the skipped payment must be repaid.
How are skipped payments to be paid?
There are basically three options here:
- Reinstatement: Make a one-time payment for the amount due.
- Repayment Plan: Pay extra each month on the amount due.
- Loan Modification: Rewrite the mortgage loan to pay the amount due over the remaining term of the loan.
In addition to allowing for a payment forbearance, FHA and Freddie Mac loans will also receive the following benefits:
- Waiving assessments of penalties and late fees,
- Halting all foreclosure sales and evictions of borrowers living in Freddie Mac-owned homes until at least May 17, 2020,
- Suspending reporting to credit bureaus of delinquency related to forbearance,
- Offering loan modification options that lower payments or keep payments the same after the forbearance period.
Not sure if you have a Fannie Mae or Freddie Mac Loan?
USDA Rural Housing Development Loans.
A similar loan deferment program is also being sponsored by the USDA home loans.
Contact Your Mortgage Company:
Bank of America
Lakeview Loan Servicing, LLC
Mr. Cooper a/k/a Nationstar
Image courtesy of Flickr and sergio santos