Are you struggling to make your mortgage payments due to COVID-19 related issues?

Ask your lender for a forbearance. A forbearance will stop payments for up to 180 days. And know that your lender can’t force you to make up payments at the end of the forbearance!

Many homeowners have called into their banks asking about forbearance only to be told they have to pay the lump sum at the end of the forbearance.

NOT ANYMORE! If your mortgage is backed by Fannie Mae or Freddie Mac, there is good news.

On April 27, 2020, Federal Housing Finance Agency Director Mark Calabria clearly stated, “During this national health emergency, no one should be worried about losing their home. No lump sum is required at the end of a borrower’s forbearance plan.”

Let’s set something straight. A forbearance is a pause in making your mortgage payments for up to 180 days. It does not forgive payments. They must be repaid.

A COVID -19 related issue could be any number of situations.

• You or a spouse lost their job or suffered a reduction of hours due to COVID-19
• You own rental property and the tenant(s) quit paying rent or paid reduced rent.
• You own a business that has lost income due COVID-19 related issues.
• You suffered a COVID-19 infection.
• You had to care for someone with a COVID-19 infection.

So now you can’t make your mortgage. You call the servicer. And they tell you that you have to pay the mortgage payments you miss at the end of the forbearance. DON’T ACCEPT THIS.

If your loan is backed by FANNIE MAE or FREDDIE MAC, they are not allowed to require a lump sum at the end of the forbearance agreement.

There has been a lot of confusion as a result of the CARES Act which stated that “A borrower whose mortgage is backed by either the government, (FHA) or GSEs (Fannie /Freddie) and who is experiencing a COVID “related” hardship can request AND MUST be granted forbearance of up to 180 days.”

BUT, the CARES Act doesn’t state HOW the forbearance is to be repaid. So many mortgage servicers have been making statements that payments have to be made current when the forbearance is over. What kind of help is that? Who can repay 180 days of mortgage payments?

You don’t. And the Federal Government says you don’t, as long as your loan is backed by FANNIE MAE OR FREDDIE MAC.

And if your loan is backed by FHA, they are currently looking at similar options.

Give us a call to see if your loan is owned by Fannie Mae or Freddie Mac, then we can discuss the next steps!

We have your back during this crisis!

This post will be updated as the situation changes.

Stay safe!