Forbearance Period Ending - What's Next?
For educational purposes; individuals should contact their loan servicer for specific program guidance.
When the first States entered into mandatory stay-at-home periods, nobody could predict an end date certain. While some people were able to return to work and stabilize financially, many homeowners continue struggling. If your 90-day forbearance is set to expire, and you still cannot pay your mortgage, you may still have options.
If your loan is backed by the government, the CARES Act allows you to temporarily suspend mortgage payments if you are experiencing financial difficulty from COVID-19. This includes FHA, VA, USDA, Fannie Mae and Freddie Mac loans. Under the CARES Act, you have the right to:
- Request forbearance up to 180 days, and
- Request an extension for an additional 180 days
If you are nearing the end of your initial forbearance period and still need help, contact your loan servicer using the contact information on your monthly mortgage statement to request an extension.
Government-backed loan servicers have recently announced updated relief plans and measures to continue offering the most support for American homeowners.
FHA and HUD
Borrowers are now able to receive a forbearance for up to six months, and can request an additional six months if needed. Any borrowers were current or less than 30 days delinquent on payments as of March 1, 2020 may be eligible to the COVID-19 Standalone Partial Claim; borrowers are able to make incremental repayments on their loan rather than a lump sum.
The Department of Housing and Urban Development (HUD) defines a partial claim as “a zero interest, no fee, junior lien on the borrower’s property that will become payable when the borrower sells their home, pays off their mortgage, or their mortgage otherwise terminates.” More information and resources on the COVID-19 Standalone Partial Claim and other options for FHA borrowers are available here.
Freddie Mac Multifamily
In additions to provisions set by the CARES Act, Freddie Mac Multifamily is now offering three supplemental forbearance relief options for borrowers continuing to struggle through the end of their forbearance periods. The options allow borrowers to either:
- Delay the start of the repayment period following forbearance,
- Extend the repayment period, or
- Extend the forbearance period with an optional extended repayment period.
Any multifamily landlords whose properties are financed with a Freddie Mac Multifamily loan can defer their loan payments, so long as they an demonstrate COVID19-related hardships. More on that here.
Privately Funded Loans
Privately-funded loans are not protected under the CARES act, but Bankrate has provided a list of private banks who are offering mortgage relief for their borrowers. Please visit your loan servicer’s website or call for more information for a privately funded loan.
Lower Your Monthly Payments
This is a stressful time for everyone, but you do have options. If you’re able to keep making your mortgage payments, but are seeking a lower rate, get started with us today for a free rate quote. You may be able to take advantage of one of the lowest mortgage interest rate periods in history!