There are several rules designed to help homeowners impacted by the Coronavirus who are having trouble making mortgage payments. The points below summarize the latest rules and recommendations.
Please be advised that the rules continue to change, so it’s always best to stay in regular contact with your bank to understand how they are handling your specific situation.
- Your loan must be federally backed (FHA, Fannie Mae, Freddie Mac).
- Forbearance allows the homeowner to suspend monthly payments if they are experiencing a hardship or interruption in their ability to make payments. These payments will be due once the forbearance period ends.
- Hardship can be direct or indirect, whether you are facing job loss, reduced income, illness, or other issues affecting your ability to make payments.
- The rules should also apply if a co-borrower or family member has similarly affected the ability to pay.
- Privately backed loans currently do not have guidance or federal protection.
- If you think you will have trouble making payments, call your bank right away.
- Your credit score shouldn’t be affected, but it might. Freddie Mac has instructed mortgage servicers not to report delinquencies to the credit bureau. Check your credit report on a regular basis to be sure your credit is not impacted.
- Most borrowers won’t know exactly how they will be allowed to catch up on missed payments until the forbearance period ends.
- Many loan servicers will allow borrowers to apply for repayment plans, which means monthly payments will resume and will be higher than usual as the amount past due is spread out over time. Loan modifications, which change the terms of the loan, may be allowed. Additional documentation is required for these options and acceptance is not guaranteed.
- Borrowers with loans insured by FHA can resume normal payments once forbearance ends.
See the article https://apple.news/AGZ5vvZUWSm6JQC1G1KoJlw for more information.