FREE Forbearance & Modification Assistance Provided by NHSIE,

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FORBEARANCE AND MODIFICATION SERVICE PROVIDERS

If you’re a homeowner behind on your mortgage payments and your mortgage company is not providing any answers or assistance, we are here to help you by providing FREE Forbearance & Modification
information and/or assistance.

FREE Forbearance & Modification Assistance Provided by NHSIE.

If you’re a homeowner behind on your mortgage payments and your mortgage company is not providing any answers or assistance, we are here to help you by providing FREE Modification
information and/or assistance.

FREE MORTGAGE

Forbearance & Modification Services

Let us help you identify the best way to
 keep your home!

NHSIE Promise To You

FREE Forbearance & Loan Modification Assistance for families that are currently behind on their mortgage payments or potentially will be and are seeking foreclosure prevention options.

The NHSIE team we will evaluate your current or soon to be mortgage situation and provide you with a clear understanding and the options available to you by your mortgage provider and other entities.

In addition, we will inform you as to how the forbearance and loan modification process works, the steps needed to partake in a modification consideration, filling out the modification application, the submission of your modification packet and the possible outcomes of a modification request.

Furthermore, NHSIE promises you, that we will work diligently to assist you in receiving the best modification approval that best serves you and your family.

FREE Forbearance & Modification Assistance Provided by NHSIE, A Non Profit. Get Started by Filling Out This Form

 

NHSIE

Forbearance News

This could all be avoided if the HEROES Act is signed this week.

On May 13, House Speaker Nancy Pelosi (D-CA) introduced the HEROES Act, which includes $200 billion of additional funding for housing and homelessness programs. The HEROES Act passed in the House, but was labeled too “pricey” for some and is awaiting approval from the Senate.

Here is some of what the HEROES Act contains:

  • $100 billion in emergency rental assistance known as the Emergency Rental Assistance Act and Rental Market Stabilization Act
  • $11.5 billion in Emergency Solutions Grants to aid those experiencing homelessness
  • $1 billion for first-year funding of 100,000 new emergency housing vouchers
  • a $75 billion Homeowner Assistance Fund to provide homeowners with help covering mortgage payments, property taxes, utility payments and other housing payments
  • Other funds for the Department of Housing and Urban Development

If signed, the HEROES Act would extend the current 120-day eviction moratorium originally stipulated in the CARES Act.

This would help renters in federally assisted properties with an incremental 12-month moratorium, and landlords would have to provide a 30-day notice of eviction to tenants after the new moratorium expires.

Homeowners would also be protected by the Act and will be granted a 60-day mortgage forbearance automatically if their mortgage became 60 days delinquent between March 13 and the day the bill was enacted, and they had not already received forbearance.

Under the Act, Multifamily property owners who receive forbearance will not be able to charge tenants late fees or penalties, report negative information to credit agencies, or evict tenants for nonpayment of rent.

Introducing Fannie Mae COVID-19 Payment Deferral

Four facts about the new repayment option

Millions of Americans are contacting their mortgage servicers to set up a mortgage forbearance plan as a result of the health and economic impacts of the coronavirus. However, they are starting to realize it’s increasingly important to have a clear way to repay the amount they owe once the forbearance period ends. Meanwhile, some homeowners are not on a mortgage forbearance plan, but still face a financial hardship related to COVID-19.

Fannie Mae not only offers repayment options but also provides a new option to help. In May, we announced the COVID-19 payment deferral, which became available July 1. Here are four key facts to know about this repayment option.

1

COVID-19 payment deferral allows homeowners to repay at a later date.

Homeowners who are eligible either entered a mortgage forbearance plan or did not enter a forbearance plan but missed payments as a result of their financial hardship related to COVID-19. The new repayment option lets eligible homeowners defer unpaid mortgage payments. Their payments become a noninterest-bearing balance. The balance is either due at the maturity date or earlier upon the sale or transfer of the property, refinance of the mortgage loan, or payoff of the mortgage loan. Once the homeowner repays the balance, the owner can continue paying their regular monthly payment in accordance with the terms of the mortgage.

2

COVID-19 payment deferral is the newest home retention repayment option for homeowners

The COVID-19 payment deferral is a good repayment option for many homeowners because it’s easy to explain, immediately resolves the arrearage, and it gives the homeowner time to regain their financial footing.

3

COVID-19 payment deferral is easy to execute for mortgage servicers

Execution of the COVID-19 payment deferral is seamless for a number of reasons: It has no trial period, both Fannie Mae and Freddie Mac follow its implementation requirements, and the Servicing Management Default Underwriter™ (SMDU™) enables automation.

4

If homeowners don’t meet the eligibility requirements for COVID-19 payment deferral, they still have other repayment options

Every homeowner’s financial situation is different. The COVID-19 payment deferral will not work for everyone. Homeowners who don’t utilize COVID-19 payment deferral still have three options to help them get back on track: mortgage reinstatement, a repayment plan, or loan modification.

What options are available after a mortgage forbearance plan?

Homeowners with a resolved hardship related to COVID-19 (including those who are exiting a forbearance plan) have options to bring their loan current. Servicers should discuss options with homeowners and determine eligibility.

Options after a forbearance plan include:

Reinstatement

Homeowner resumes making their regular monthly mortgage payments and repays the missed amount all at once at the end of the forbearance plan.

Guidance: Servicing Guide F-2-11, Fannie Mae’s Workout Hierarchy

Repayment plan

Homeowner resumes making their regular monthly payments, plus an additional portion of the missed amount each month, until the missed amount is paid off.

Guidance: Servicing Guide D2-3.2-02: Repayment Plan

COVID-19 payment deferral

Homeowner resumes making regular monthly payments, but no extra amounts. This deferral resolves the hardship by deferring the missed amount (including any servicing advances and escrow advances made on their behalf for taxes and/or insurance) to the maturity date as a non-interest bearing balance. The deferred amount is due on the maturity date (or earlier whenever the home is sold, or the loan is refinanced or otherwise paid off).

Guidance: Lender Letter LL-2020-07, COVID-19 Payment Deferral

Fannie Mae Flex Modification

Homeowner is experiencing a permanent impact to their ability to pay their regular monthly mortgage payment. After the homeowner completes a trial period plan, all unpaid amounts are added to the unpaid principal balance, and monthly mortgage payments are permanently modified to what may be a lower amount through a rate reduction and a term extension to 40 years (480 payments) from the effective date of the modification. In addition, a portion of the interest-bearing balance may be converted to a non-interest bearing principal balance due at the maturity date (or earlier whenever the home is sold, or the loan is refinanced or otherwise paid off.) The homeowner may pay more total interest because the loan is extended over a new 40-year term.

What is mortgage forbearance?

 As the coronavirus began sweeping through the country in March, many states issued shut-down orders for businesses, putting as many as 40 million people out of work by May. On March 27, Congress passed the CARES Act to offer economic relief to those affected by the shut-downs, expanding unemployment benefits and offering mortgage forbearance to homeowners with mortgages backed or insured by the federal government, including Freddie Mac, Fannie Mae, VA and FHA.

Under the CARES Act, homeowners can ask for forbearance from their mortgage servicer and suspend payments for up to 12 months. There are now more than 4 million mortgage loans in forbearance, and we know that homeowners have many questions about the specifics of the program.

We have partnered with Freddie Mac to bring you this FAQ page to answer those questions and provide updates to the program. Our goal is to provide a resource that is continuously updated with the latest news and information on forbearance so that lenders, servicers and homeowners can work together during this period of crisis and recovery.

FHFA Extends Foreclosure and Eviction Moratorium

Today, to help borrowers and renters who are at risk of losing their home due to the coronavirus national emergency, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will extend their single-family moratorium on foreclosures and evictions until at least August 31, 2020. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The current moratorium was set to expire on June 30.

“To protect borrowers and renters during the pandemic we are extending the Enterprises’ foreclosure and eviction moratorium. During this national health emergency no one should worry about losing their home,” said Director Mark Calabria.

The Agency announced earlier this month that it is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac (the Enterprises) designed to help borrowers during the COVID-19 national emergency, including the authority to purchase mortgages in forbearance, until at least July 31. Other flexibilities that have been extended include:

  • Alternative appraisals on purchase and rate term refinance loans
  • Alternative methods for verifying employment before loan closing
  • Expanding the use of power of attorney and remote online notarizations to assist with loan closings

The FHFA previously announced that Fannie Mae and Freddie Mac would be able to buy loans in forbearance, with note dates on or before June 30, as long as they are delivered by August 31 and have missed just one mortgage payment. Additionally, the agency will be re-proposing the updated minimum financial eligibility requirements for the Enterprises.

FHFA has determined that it is prudent to work with the Enterprises to reassess and re-propose these requirements, including incorporating lessons learned from the evolving COVID-19 national emergency,” the Agency said in a release.

“FHFA will continue to monitor the coronavirus situation and update policies as needed,” the agency said in a release. “To understand the protections and assistance the government is offering people having trouble paying their mortgage, please visit the joint Department of Housing and Urban Development, FHFA, and the Consumer Financial Protection Bureau website at cfpb.gov/housing​.​”

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Freddie Mac COVID-19 Payment Deferral

Guide Bulletin 2020-15: COVID-19 Payment Deferral 

This Bulletin announces Freddie Mac COVID-19 Payment Deferral. 

Freddie Mac COVID-19 Payment Deferral

Issued 05/13/2020 

 

SUBJECT: FREDDIE MAC COVID-19 PAYMENT DEFERRAL

With Bulletin 2020-6, Freddie Mac announced the Payment Deferral, a loss mitigation solution for Borrowers who became delinquent due to a short-term hardship that has since been resolved. As we continue to monitor and respond to the COVID-19 pandemic, and in response to Servicer feedback, we are announcing the Freddie Mac COVID-19 Payment Deferral.

The COVID-19 Payment Deferral leverages a similar concept to the recently announced Payment Deferral solution. Under the terms of a COVID-19 Payment Deferral an eligible Borrower will be brought current by deferring delinquent amounts to create a non-interest bearing balance that will become due at the earlier of the Mortgage maturity date, payoff date, or upon transfer or sale of the Mortgaged Premises. The remaining Mortgage term, interest rate schedule (i.e., whether a fixed-rate Mortgage, an ARM or Step-Rate Mortgage) and maturity date of the Mortgage will all remain unchanged.

KEY DIFFERENCES FROM A STANDARD PAYMENT DEFERRAL

We have made several adjustments to the requirements of the standard Payment Deferral to create the COVID-19 Payment Deferral, which is designed specifically to assist Borrowers who have a COVID-19 related hardship. All relevant requirements are described in detail in this Bulletin. However, there are several key differences between the previously announced solution and the COVID-19 Payment Deferral, including:

  • The Borrower’s Delinquency must have been the result of a COVID-19 related hardship, as described in Bulletin 2020-4, and that hardship must be resolved
  • The Borrower must have been current or less than 31 days delinquent as of the effective date of the National Emergency declaration date, March 1, 2020
  • The Mortgage may be up to 12 months delinquent as of the evaluation date
  • The Borrower is not required to make consecutive payments immediately prior to executing a COVID-19 Payment Deferral (i.e., there is no rolling delinquency requirement)
  • The Servicer must defer all delinquent principal and interest payments (P&I), but for a COVID-19 Payment Deferral must also defer any other amounts that are permitted to be capitalized as part of a Freddie Mac Flex Modification®, and as described in Guide Section 9206.15
  • Certain eligibility restrictions of the Payment Deferral are not applicable to the COVID-19 Payment Deferral (e.g., there is no origination seasoning requirement or any restrictions regarding a previous non-COVID-19 Payment Deferral or a recently failed Flex Modification or Flex Modification Trial Period Plan)
  • Under certain circumstances, the Servicer must proactively send an eligible Borrower an offer for a COVID-19 Payment Deferral without first establishing quality right party contact (as described in the “Solicitation for a COVID-19 Payment Deferral” section below)

Servicers must complete a COVID-19 Payment Deferral in accordance with all requirements described in the below sections of this Bulletin.

EFFECTIVE DATE

Servicers must begin evaluating eligible Borrowers for a COVID-19 Payment Deferral on and after July 1, 2020.

FREDDIE MAC COVID-19 PAYMENT DEFERRAL

Eligibility requirements and exclusions

To be eligible for the COVID-19 Payment Deferral, all of the following requirements must be met:

COVID-19 Payment Deferral eligibility requirements and exclusions

Borrower eligibility

The Servicer must achieve quality right party contact in accordance with the requirements specified in Bulletin 2020-10 (“Limited QRPC”). In addition to the information required to achieve Limited QRPC, the Servicer must confirm that the Borrower:

  • Has a resolved COVID-19 hardship
  • Is capable of continuing to make the existing contractual monthly Mortgage payment
  • Is unable to afford a repayment plan or full reinstatement of the Mortgage

If the Borrower’s Mortgage was previously modified under the Home Affordable Modification Program (HAMP®) and the Borrower is in “good standing” when they entered into a COVID-19 forbearance plan and the Borrower transitions directly to a COVID-19 Payment Deferral, then the Borrower will not lose good standing as a result of the forbearance plan or as a result of a COVID-19 Payment Deferral.

Delinquency/Payment requirements

The Mortgage must:

  • Have been current or less than 31 days delinquent as of March 1, 2020, the effective date of the National Emergency declaration related to COVID-19, and
  • Be 31 or more days delinquent but less than or equal to 360 days delinquent as of the date of evaluation

Note: If a Borrower had a COVID-19 related hardship but was 31 or more days delinquent as of the effective date of the National Emergency declaration (March 1, 2020), and the Servicer determines the Borrower can maintain the existing monthly contractual payment, the Servicer must transmit an exception request via Workout Prospector® to Freddie Mac.

Mortgage/property eligibility

The Mortgage:

  • Must be a conventional First Lien Mortgage currently owned or guaranteed by Freddie Mac; and
  • May be a fixed-rate Mortgage, an ARM or a step-rate Mortgage

The property may be a Primary Residence, second home or Investment Property and may be vacant or condemned.

Mortgages subject to indemnification agreements

If the Mortgage is subject to an indemnification agreement and is otherwise eligible under the COVID-19 Payment Deferral requirements of this Bulletin, the Servicer has the discretion to approve the COVID-19 Payment Deferral provided the following conditions are met:

  • The Mortgage receiving the COVID-19 Payment Deferral retains its credit enhancement
  • If the Servicer is not the credit enhancement provider, the Servicer must first obtain in writing any required approval under the terms of the credit enhancement from the entity providing the enhancement to enter into a COVID-19 Payment Deferral that complies with the requirements of this Bulletin
  • The Servicer remits to Freddie Mac an annual payment for the amount of COVID-19 Payment Deferral related costs (e.g., interest rate shortfall). The loss amount calculation for the COVID-19 Payment Deferral will be determined in the same manner as the Modification Loss Amounts as described in Bulletins 2016-5 and 2017-1.

Note: The Servicer is not eligible to receive an incentive for completing a COVID-19 Payment Deferral on a Mortgage that is subject to an indemnification agreement.

Mortgage insurance

If the Mortgage is subject to mortgage insurance, and the mortgage insurance company is not included on our list of delegated mortgage insurance companies for Mortgage modifications, the Servicer must obtain delegation of authority from the MI or seek approval from the MI to complete the COVID-19 Payment Deferral.

Texas Equity Section 50(a)(6) Mortgages

If the Borrower is eligible and qualifies for the COVID-19 Payment Deferral, the Servicer must offer the COVID-19 Payment Deferral to the Borrower. If the Servicer receives Borrower notification classifying the COVID-19 Payment Deferral as a modification and claiming that the terms of the modification agreement do not comply with the provisions of Article XVI Section 50(a)(6) of the Texas Constitution, the Servicer must notify Freddie Mac within seven Business Days of receipt of such objection or complaint to Freddie Mac at Distressed_Property@freddiemac.com and include the following:

  • Freddie Mac loan number
  • Servicer loan number
  • Transaction type (e.g., Texas Home Equity modification)
  • Accounting Cycle in which Freddie Mac settled the workout
  • Servicer’s analysis (e.g., a Borrower complaint received related to a provision)

Upon receipt of Freddie Mac’s instructions, the Servicer must comply with any required response time frames to claims of defects and any other complaint in accordance with Section 8104.1 and the Texas Constitution.

Borrower documentation

The Servicer must not require a complete Borrower Response Package (BRP) to evaluate the Borrower for a COVID-19 Payment Deferral if the Borrower has been evaluated in accordance with all requirements described in this Bulletin and the eligibility criteria are satisfied.

Eligibility exclusions

The following Mortgages and Borrowers are ineligible for the COVID-19 Payment Deferral:

  • FHA, VA and Guaranteed Rural Housing Mortgages
  • Mortgages subject to recourse
  • The Mortgage was subject to a previous COVID-19 Payment Deferral
  • Mortgages that are subject to an approved short sale or deed-in-lieu of foreclosure transaction
  • The Mortgage is currently subject to an unexpired offer to the Borrower for a mortgage modification or other alternative to foreclosure
  • Borrowers who are currently performing under a modification Trial Period Plan, a non-COVID-19 forbearance plan or repayment plan

Determining the terms of the COVID-19 Payment Deferral

The steps to determine the terms of the COVID-19 Payment Deferral are described in the table below:

Determining COVID-19 Payment Deferral Terms

Delinquent Payment Deferral

The Servicer must follow the steps below when determining the terms of the COVID-19 Payment Deferral.

If the existing Mortgage includes a non-interest bearing UPB as a result of a prior modification, the terms impacting that non-interest bearing UPB will remain unchanged.

The Servicer must apply the COVID-19 Payment Deferral forbearance as follows:

  • Defer the delinquent P&I and any other expenses or amounts due that are permitted to be capitalized under Flex Modification capitalization rules (described in Section 9206.15(b)), into an existing or newly created non-interest-bearing UPB (Deferred UPB). The aggregate Deferred UPB will become due on the earlier of: 
    • The Mortgage maturity date
    • The Mortgage payoff date (e.g., refinance or payoff of the interest-bearing UPB); or
    • Upon transfer or sale of the Mortgaged Premises

The Servicer must:

  • Advance the DDLPI to bring the Mortgage to current status
  • Ensure that the remaining payment schedule associated with the interest-bearing UPB remains unchanged from the Mortgage’s pre-COVID-19 Payment Deferral payment schedule
  • Waive all accrued and unpaid late charges upon completion of the COVID-19 Payment Deferral

When offering the COVID-19 Payment Deferral, the Servicer must ensure all other terms of the existing Mortgage remain unchanged including, but not limited to, the:

  • Remaining amortization schedule
  • Monthly P&I portion of the existing contractual monthly Mortgage payment
  • Interest rate (this includes maintaining the existing rate adjustment schedule for an ARM or a Step-Rate Mortgage); and
  • Maturity date

NOTE: The maximum number of monthly payments that may be deferred as part of a COVID-19 Payment Deferral is twelve.

Escrow

Escrow analysis

The Servicer is not required to perform an Escrow analysis in conjunction with a COVID-19 Payment Deferral and may continue to perform the Escrow analysis as regularly scheduled.

If the Servicer chooses to perform an Escrow analysis, any Escrow account shortage that is identified at the time of the COVID-19 Payment Deferral must not be capitalized and the Servicer is not required to fund any existing Escrow account shortage. Any Escrow advances must be included in the deferred balance, as described in the “Delinquent COVID-19 Payment Deferral” section, above. In addition, the Servicer is not required to revoke any Escrow account waiver.

Completing a COVID-19 Payment Deferral

The Servicer must send a COVID-19 Payment Deferral Agreement provided as Attachment A to this Bulletin (see Download dropdown above), or the Servicer’s customized equivalent of the COVID-19 Payment Deferral Agreement, to the Borrower no later than five days after completion (e.g., a closed /settled workout option) of the COVID-19 Payment Deferral. In the event the Servicer elects to require the Borrower to sign and return the COVID-19 Payment Deferral Agreement, it must receive the fully executed COVID-19 Payment Deferral Agreement prior to the settlement date.

The use of Attachment A to this Bulletin (see Download dropdown above) is optional; however, it reflects the minimum level of information that the Servicer must communicate. The Servicer must ensure the COVID-19 Payment Deferral Agreement complies with applicable law.

The Servicer must complete the COVID-19 Payment Deferral in the same month it determines the Borrower is eligible. If the Servicer is unable to complete the COVID-19 Payment Deferral within this timeframe, the Servicer may, at its option, use an additional month to allow for sufficient processing time (“processing month”) to complete the COVID-19 Payment Deferral. The Servicer must treat all Borrowers equally in applying the processing month, as evidenced by a written policy (i.e., the criteria for when a processing month is required must be the same for all Borrowers). Additionally, the Servicer is not permitted to defer more than twelve months of payments as part of a Payment Deferral, so if a processing month is used for a borrower who is already twelve months delinquent, the Servicer must require a payment during the processing month. Otherwise, the Borrower is not required to submit a payment during the processing month for a COVID-19 Payment Deferral.

The Servicer must process a COVID-19 Payment Deferral Agreement in compliance with the requirements for processing a regular Payment Deferral Agreement, as described in Section 9203.23. This includes the requirements for recordation, title endorsement and Document Custodian. The table below provides some of the key criteria:

COVID-19 Payment Deferral Agreement

COVID-19 Payment Deferral conditions

Recordation

The Servicer must ensure that the Mortgage subject to the COVID-19 Payment Deferral retains its First Lien position and continues to be fully enforceable in accordance with its terms at the time of completion of the COVID-19 Payment Deferral, throughout the term of the Mortgage, and during any bankruptcy or foreclosure proceeding involving the Mortgage.

The Servicer must record the COVID-19 Payment Deferral Agreement only when doing so is necessary to ensure its compliance with this First Lien retention and the COVID-19 Payment Deferral enforcement requirement.

Title endorsement

  • The Servicer is responsible for ensuring that the Mortgage subject to the COVID-19 Payment Deferral complies with applicable law, retains Freddie Mac’s First Lien position, and is enforceable against the Borrower(s) in accordance with its terms
  • The Servicer must obtain a title endorsement or similar title insurance product issued by a title insurance company if the COVID-19 Payment Deferral Agreement will be recorded

Document Custodian

  • If the COVID-19 Payment Deferral Agreement is not required to be signed by the Borrower, the Servicer must send a copy of the Servicer-executed COVID-19 Payment Deferral Agreement to the Document Custodian within 25 days of the effective date of the COVID-19 Payment Deferral
  • If the COVID-19 Payment Deferral Agreement must be recorded, the Servicer must: 
    • Send a certified copy of the fully executed COVID-19 Payment Deferral Agreement to the Document Custodian within 25 days of the effective date of the COVID-19 Payment Deferral; and
    • Send the original COVID-19 Payment Deferral Agreement when returned from the recorder’s office to the Document Custodian within five Business Days of receipt
  • If the COVID-19 Payment Deferral Agreement must be signed by the Borrower but not recorded, the Servicer must send the fully executed original COVID-19 Payment Deferral Agreement to the Document Custodian within 25 days of the effective date of the COVID-19 Payment Deferral

Evaluation hierarchy

To be eligible for a COVID-19 Payment Deferral, a Borrower must have been current or less than 31 days delinquent as of the effective date of the National Emergency declaration (March 1, 2020). Otherwise, the Servicer must conduct all loss mitigation evaluations in accordance with our standard loss mitigation evaluation hierarchy, as described in Section 9201.2 (or must submit an exception request for Freddie Mac approval, as described above).

If Limited QRPC is established with a COVID-19 impacted Borrower who was current or less than 31 days delinquent (i.e., the Borrower had not missed more than one monthly payment) as of the effective date of the National Emergency declaration, and the Borrower is unable to resolve the Delinquency through a reinstatement or repayment plan, the Servicer must evaluate the Borrower for the loss mitigation options set forth in the following COVID-19 evaluation hierarchy:

  1. COVID-19 Payment Deferral
  2. Flex Modification (in accordance with the requirements described in Bulletin 2020-7, if applicable)
  3. Standard Short Sale
  4. Standard Deed-in-Lieu of Foreclosure

NOTE: In most cases, Borrowers with a COVID-19 related hardship who qualify to be evaluated for a COVID-19 Payment Deferral (as described in this section) will be transitioning from a COVID-19 forbearance, but forbearance is not a prerequisite in order to be eligible.

Extend Modification and Capitalization and Extend Modification

Upon the mandatory effective date of the COVID-19 Payment Deferral on July 1, 2020, we are revising the guidance we provided in Bulletin 2020-4 by eliminating the Extend Modification and the Capitalization and Extend Modification as options in the COVID-19 evaluation hierarchy and replacing those options with the COVID-19 Payment Deferral, as shown in the hierarchy described above. Prior to the July 1 effective date, Servicers must continue to evaluate Borrowers based on the existing guidance from Bulletin 2020-4, which includes the Extend Modification and Cap and Extend Modification.

Solicitation for a COVID-19 Payment Deferral

The Servicer must proactively solicit the Borrower to offer a COVID-19 Payment Deferral within 15 days after the expiration of the forbearance plan if:

  • The Servicer is not able to establish Limited QRPC during the COVID-19 related forbearance plan, and
  • The Mortgage was current or less than 31 days delinquent as of the effective date of the National Emergency declaration (March 1, 2020), and
  • The Mortgage does not meet any of the criteria described in the “Eligibility Exclusions” section of this Bulletin

We have provided a solicitation letter template as Attachment B to this Bulletin (see Download dropdown above) that the Servicer may use at its discretion, but the solicitation letter must, at a minimum, provide the details of the COVID-19 Payment Deferral and instructions on how to accept the offer. The Borrower may accept the COVID-19 Payment Deferral offer via:

  • Contacting the Servicer directly in accordance with any acceptable outreach and communication method as described in Bulletin 2020-7, or
  • Returning an executed COVID-19 Payment Deferral Agreement, if applicable, or
  • Any other method evidencing the Borrower’s acceptance, in compliance with applicable law (e.g., making the monthly payment due under the terms of the COVID-19 Payment Deferral offer*)

The solicitation letter must also include language that additional forbearance options are available, as applicable, if the Borrower’s hardship is ongoing, or a Flex Modification may be available if the Borrower needs payment relief.

*If permitting payment to constitute acceptance of the COVID-19 Payment Deferral offer, the Servicer must require the Borrower’s payment to be submitted so that it is received by the Servicer in the same month as the Payment Deferral offer is sent. This requirement must be described in the Solicitation Letter, if applicable.

Solicitation for a Flex Modification

If the Borrower is ineligible for a solicitation for a COVID-19 Payment Deferral, as described above, then the Servicer must evaluate the Borrower for a streamlined offer for a Flex Modification (provided that as of the evaluation date the Borrower is at least 90 days delinquent or is at least 60 days delinquent and has a Step-Rate Mortgage). Flex Modifications for Borrowers with a COVID-19 related hardship who were current or less than 31 days delinquent as of March 1, 2020 must be completed in accordance with the streamlined Flex Modification evaluations described in the section below, under “Reduced Flex Mod Requirements.” Otherwise, the Servicer must evaluate in accordance with our standard requirements in Section 9206.5. The Servicer must send a streamlined offer for a Flex Modification to an eligible Borrower within 15 days after the expiration of the forbearance plan.

If the Borrower was eligible for a solicitation for a COVID-19 Payment Deferral, but did not accept the offer, then the Servicer must evaluate the Borrower for a streamlined offer for a Flex Modification following the same requirements as described in the above paragraph, except that the Servicer must send the streamlined offer to an eligible Borrower within 15 days of the expiration of the COVID-19 Payment Deferral offer.

Flex Modification evaluations for failed COVID-19 Payment Deferral

If the Borrower accepts a COVID-19 Payment Deferral and subsequently becomes 60 days delinquent within six months of the effective date, then the Servicer must evaluate the Borrower for a Flex Modification based on the special eligibility criteria described below, and the Servicer is not required to first establish quality right party contact or collect a complete Borrower Response Package. A Flex Modification offer must be sent to an eligible Borrower under these requirements no later than the 75th day of Delinquency.

Reduced Flex Modification requirements

In lieu of the regular Guide requirements for Flex Modification eligibility as described in Sections 9206.5 and 9206.6, the Servicer will exclude only the following Mortgages from eligibility in these instances:

  • The Mortgage is an FHA, VA or Guaranteed Rural Housing Mortgage
  • The Mortgage is subject to recourse
  • The Mortgage is currently performing under another forbearance plan, Trial Period Plan or repayment plan
  • The Mortgage is subject to an approved short sale or deed-in-lieu of foreclosure
  • The Mortgage is currently subject to an unexpired offer to the Borrower for another modification or other foreclosure prevention alternative, such as a forbearance plan or repayment plan

If the Servicer was not collecting Escrows on the existing Mortgage, the Borrower is not required to establish an Escrow account as a condition of the modification unless otherwise required by applicable law, or the Servicer confirms that the taxes and insurance premiums have not been paid and are past due.

Workout Prospector®

Workout Prospector® is being updated to accommodate the submission and settlement of COVID-19 Payment Deferrals. Although Servicers must begin their evaluations on and after July 1, 2020, the Payment Deferral path described below will not be available until July 13, 2020. Therefore, settlements using Workout Prospector should be withheld until July 13, 2020, even when the evaluation may have been conducted on or after July 1, but before July 13.

To model the terms of the COVID-19 Payment Deferral and complete the settlement process, Servicers must use the “Payment Deferral” path in Workout Prospector. Servicers must comply with the requirements in Section 9203.24 and the instructions provided in the Workout Prospector Users’ Guide to complete the submission and settlement process for a COVID-19 Payment Deferral.

Servicers may use a proprietary system or third-party system to generate the terms of the COVID-19 Payment Deferral; however, this data also must be entered in its entirety into Workout Prospector. The Servicer must ensure that its results comply with the requirements in Sections 9203.18 through 9203.25 and are the same as the data entered into Workout Prospector prior to sending the COVID-19 Payment Deferral Agreement to the Borrower.

Reporting requirements

In most cases, the COVID-19 Payment Deferral does not have an associated unique EDR status code. For each Mortgage subject to the COVID-19 Payment Deferral, the Servicer must continue reporting the appropriate delinquency status information to Freddie Mac through EDR in accordance with requirements in Section 9102.7 and Guide Exhibit 88, Servicing Tools. Once the COVID-19 Payment Deferral has been completed and the Mortgage is brought current, the EDR status code must reflect the Mortgage as current.

However, the Servicer must report Event Code H6, Payment Deferral Offer, to notify Freddie Mac that the Mortgage is subject to an active COVID-19 Payment Deferral offer in the following instances:

  • The forbearance period ends prior to settlement of an accepted COVID-19 Payment Deferral (e.g. if the Servicer elected to use a processing month and the forbearance plan expires), or
  • The Servicer has made a proactive offer following the expiration of a forbearance plan in accordance with the “Solicitation for a COVID-19 Payment Deferral” section above

In these instances, the Servicer must continue to report Event Code H6 until the offer has expired, or the Payment Deferral has been completed.

Other requirements

Other requirements for the COVID-19 Payment Deferral include:

  • Reimbursement of expenses: Servicers may use the Reimbursement System to request reimbursement for the following fees associated with the COVID-19 Payment Deferral in accordance with Section 9203.25
    • Recordation fees
    • Title costs
    • Notary fees
  • Credit reporting: For each Mortgage that receives the COVID-19 Payment Deferral, the Servicer must provide a “full file” status report describing the status of the Mortgage to each of the four major credit repositories in accordance with the credit bureau standards as provided by the Consumer Data Industry Association, and subject to applicable law (e.g. the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and the Fair Credit Reporting Act).
  • Incentive payment: Servicer incentive for the COVID-19 Payment Deferral will be announced at a later date.
  • Servicing fee: There are no adjustments being made to the servicing fee, referred to as the Servicing Spread. The Servicer will continue to receive the Servicing Spread it was receiving prior to completing a COVID-19 Payment Deferral.
  • Future Flex Modification evaluations: If the Servicer is evaluating a Borrower for a future Flex Modification, the COVID-19 Payment Deferral will not count as a previous loan modification for purposes of calculating the number of times the Mortgage has previously been modified.
  • Future Payment Deferral evaluations: If the Servicer is evaluating a Borrower for a future (non-COVID-19) Payment Deferral in accordance with Bulletin 2020-6, the COVID-19 Payment Deferral will not cause the Borrower to be ineligible.
  • No Trial Period Plan: The COVID-19 Payment Deferral does not include a Trial Period Plan. The Borrower does not need to complete a Trial Period Plan prior to entering into a COVID-19 Payment Deferral.
  • Reimbursement of advanced interest, taxes and insurance: The interest the Servicer advances during the Delinquency, along with any advances for escrow, taxes or insurance, will be reimbursed to the Servicer upon settlement of the COVID-19 Payment Deferral.

 

FHFA, FHA Extends Foreclosure, Eviction Moratoriums

FHFA, FHA Extends Foreclosure, Eviction Moratoriums

 

Foreclosure and eviction moratoriums backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) have been extended to June 30. 

 

Deadlines for all foreclosure and eviction moratoriums were set to expire on Sunday. 

“During this national health emergency, no one should be forced from their home,” said FHFA Director Dr. Mark A. Calabria. “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families.”

 

The FHA announced that it would halt all new foreclosure actions and suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties. Also, the Administration will cease all evictions of persons from FHA-insured Single Family properties, excluding actions to evict occupants of legally vacant or abandoned properties.

 

“We made it clear at the beginning of this pandemic that no American should have to worry about losing their home amidst a crisis. Today’s announcement ensures that commitment,” said U.S. Department of Housing and Urban Development (HUD) Secretary Dr. Benjamin Carson. “While we have made great strides in fighting this virus, the fact remains that many Americans are still struggling as we work diligently to get our economy back on sound footing, which I have full confidence we will do through the leadership of the President.”

 

HUD Deputy Secretary Brian Montgomery said for the more than 8.1 million single-family homeowners with FHA-insured mortgages who need assistance, “our highest priority is to ensure that they have the time through the foreclosure moratorium, and the assistance they need” to remain in their homes. 

“At the same time, extending our policy flexibilities will ensure that affordable FHA-insured mortgage financing continues to remain available to support first-time and other homebuyers, and the Nation’s housing market,” Montgomery said. 

 

This comes just 24 hours after the FHFA said the GSEs debuted new payment deferral options for borrowers, saying for those who are able to return to making their monthly payment, they now have the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity. 

Servicers will begin offering deferral payment options beginning July 1, 2020. 

 

The FHFA and the GSEs, in response to COVID-19, allowed borrowers facing financial hardship to go into mortgage forbearance programs—a pause or reduction in their monthly payments. 

 

As of May 7, nearly 4.1 million homeowners are in forbearance plans, representing 7.7% of all active mortgages, according to the latest forbearance data from Black Knight. They account for $890 billion in unpaid principal and include 6.4% of all GSE-backed loans and 11% of all FHA/VA loans. At today’s level, mortgage servicers need to advance a combined $4.5 billion/month to holders of government-backed mortgage securities on COVID-19-related forbearances. Another $2.1 billion in lost funds will be faced each month by those with portfolio-held or privately securitized mortgages (some 7.2% of these loans are in forbearance as well).

 

 

 

Freddie Mac reiterates repayment policies in the wake of COVID-19

Freddie Mac reiterates repayment policies in the wake of COVID-19
MCLEAN, Va., April 27, 2020 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today reiterated that borrowers in forbearance living in homes owned by the company have many options to repay missed payments and are never required to choose doing so in one lump sum.
Freddie Mac CEO David Brickman made the following statement:
“Simply put, if you are a homeowner seeking forbearance and Freddie Mac owns your loan, you are never required to make up missed payments in a lump sum. Our policies offer a number of options to bring borrowers current, including repayment plans, resuming normal payments or lowering your monthly payment through a modification. We encourage homeowners facing hardship to work with their servicer to identify the plan that’s appropriate for their unique situation.”
In March, Freddie Mac announced it was taking a number of actions to assist homeowners facing financial hardship due to COVID-19. These include forbearance, during which a borrower’s payments are reduced or suspended. While borrowers in forbearance must repay the missed payments, full repayment immediately following forbearance is just one of many options, and they are never required to do so.
Owners facing a hardship are entitled to up to 12 months of forbearance. Servicers will start with a shorter plan and reassess to see if an extension for up to 12 months is necessary. Once the hardship has been resolved, there are several options for borrowers to repay the money owed, including:
Full repayment, known as reinstatement, where you pay back the missed payments and quickly get back on track.
A repayment plan, which allows borrowers to catch up gradually in addition to paying regular monthly payments.
Payment Deferral or modification of the loan, to keep monthly payments consistent and add the borrower’s missed payments to the end of the mortgage.
Modification of the loan, to reduce a borrower’s original monthly payment amount.
Loan servicers will reach out about 30 days before the initial forbearance plan is scheduled to end to determine which assistance program is best or if additional forbearance is needed. Borrowers who believe they are not being offered proper repayment options can reach out to the Consumer Financial Protection Bureau.

FREE Forbearance & Modification Assistance Provided by NHSIE, a Non Profit
FORBEARANCE AND MODIFICATION SERVICE PROVIDERS

If you’re a homeowner behind on your mortgage payments and your mortgage company is not providing any answers or assistance, we are here to help you by providing FREE Forbearance & Modification
information and/or assistance.

Modification Programs Available After Forbearance

Fannie Mae’s most recent Lender Letter LL-2017-09 provides more clarification on policies related to disaster relief, which includes additional details for servicers on how to evaluate borrowers for workout options after a disaster-related forbearance. In addition, the Lender Letter introduces the Fannie Mae Extend Modification for Disaster Relief, a new post-disaster forbearance modification developed jointly with Freddie Mac and the Federal Housing Finance Agency (FHFA).
The new Extend Modification for Disaster Relief results in a fixed-rate modification that extends the mortgage loan term in monthly increments to match the number of delinquent payments, not exceeding 12 months. This modification is designed for borrowers who were current or less than 31 days delinquent at the time of the disaster and meet the eligibility requirements as outlined in the Lender Letter. Servicers are encouraged to implement the Extend Modification for Disaster Relief immediately but must begin evaluating borrowers for this new modification program no later than February 1, 2018.
As part of the Lender Letter, Fannie Mae has established guidance to servicers to evaluate borrowers that are unable to become current on their mortgage loans after post-disaster forbearance relief and subsequently require a modification when the property securing the mortgage loan or the borrower’s place of employment is located in a FEMA Declared Disaster Area eligible for Individual Assistance. This guidance provides the hierarchy of modifications for which servicers must evaluate borrowers and the factors servicers should take into consideration in their evaluation. These factors include:
Was the servicer able to establish a Quality Right Party Contact (QRPC)1 with the borrower during the disaster forbearance period?
Can the borrower maintain current contractual principal, interest, taxes, and insurance?
Can the borrower manage any additional escrow repayment obligation?
Upon reviewing the required factors, the servicer will work with the borrower to determine the appropriate post-disaster-related forbearance plan modification. The below information illustrates the hierarchy of the modifications for consideration and describes the corresponding steps that are taken for each modification program that Fannie Mae makes available to those impacted by a disaster event.

Cap & Extend Modification 

  • This workout option allows a homeowner to capitalize the delinquency including unpaid interest and advanced escrow payments (taxes and insurance) into the mortgage balance while extending the term (maturity date) in monthly increments to ensure the payment amount established is in line with the original mortgage payment prior the hardship.
  • With this modification, the interest rate may stay the same depending on if the homeowner has an ARM or fix rate loan, and the market loan-to-value (MTMLTV). The term would be extended to achieve a payment equal to or less than the pre-modified payment. 
  • A borrower response packet is not required for this workout, but the servicer must establish Quality Right Party Contract (QRPC) to confirm the payment is affordable.
  • For many homeowners facing COVID-19, they have the ability to keep making the regular contractual payment once they are back to work and this option may make sense (example: their place of employment was closed for 3 months and now is back up running with no impact to their wages).

Extend Modification 

  • A Fannie Mae Extend Modification allows a homeowner to extend the term of their loan (maturity date) by the number of miss payments
  • Example: a homeowner with 20 years (240 payments) left on a 30-year mortgage and is 6 months past due would now have 246 payments left (240+6).
  • The homeowner will need to replay any miss escrow payments (taxes & insurance) over a period of time (can be spread up to 5 years).
  • The interest rate would stay the same if the homeowner has a fix rate loan and would be changed if an ARM.
  • A borrower response package is not required for this workout, but the servicer must establish Quality Right Party Contact (QRPC) to confirm the payment is affordable. 

Flex Modification 

  • A Fannie Mae Flex Modification allows a homeowner to capitalize the delinquency into the mortgage balance while extending the term (maturity date) to 480 months (number of payments) and the ARM loans, potentially adjusting the interest rate and potentially providing principal forbearance.
  • With this modification, the interest rate would stay the same if the homeowner had a fix rate loan and would be changed if an ARM. This mod targets a 20% payment reduction. 
  • With the Flex Modification, a Borrower Response Packet must be completed if the mortgage loan is less than 90 days (3 months) delinquent after forbearance. However, if 90 days (3 months) or more delinquent, a Borrower Response Packet is not required nor QRPC.
  • Unlike with the first 2 modification options, this workout gives homeowners the best chance at a lowered payment, which may be important for those facing long term income impacts related to   COVID-19

For Connecticut Avenue Securities™ (CAS) transactions, the Extend Modification for Disaster Relief will not result in modification loss amounts being passed through to investors. Under our current policy, as with any other modification, a loan must be removed from the MBS trust before any permanent modification is completed. Full details on the Fannie Mae Extend Modification for Disaster Relief and additional details on policies related to disaster relief can be read here.

Regulatory/Industry Resources

 

 

 

 

 

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Loan Modifications

All You Need to Know About Mortgage Loan Modifications

Loan modification changes the terms of your mortgage so it’s more affordable, but it could affect your credit and the amount of interest you’ll pay.

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If you’re struggling to make your monthly mortgage payments or have fallen behind, you may be at risk of losing your home. But depending on the circumstances, you may be eligible for a loan modification, which can make it easier to stay on top of mortgage payments and avoid foreclosure.

If you’re in this position, here’s what to know about getting a mortgage loan modification.

What is a loan modification? A loan modification is different from refinancing your mortgage. Refinancing entails replacing your loan with a new mortgage, whereas a loan modification changes the terms of your existing loan.

How does loan modification work?

Getting a mortgage loan modification could mean extending the length of your term, lowering your interest rate or changing from an adjustable-rate mortgage to a fixed-rate loan. Though the terms of your modification are up to the lender, the outcome is lower, more affordable monthly mortgage payments. Foreclosure is a costly process for lenders, so many are willing to consider loan modification as a way to avoid it.

Who qualifies for a loan modification?

Not everyone struggling to make a mortgage payment can qualify for a loan modification. In general, homeowners must either be delinquent or facing imminent default, meaning they’re not delinquent yet, but there’s a high probability they will be.

Reasons for imminent default include the loss of a job, loss of a spouse, a disability or an illness that has affected your ability to repay your mortgage on the original loan terms.

 

Types of loan modification programs

Some lenders and servicers offer their own loan modification programs, and the changes they make to your terms may be either temporary or permanent.

If your lender or servicer doesn’t have a program of its own, ask if you are eligible for any other assistance programs that can help you modify or even refinance your mortgage.

The federal government previously offered the Home Affordable Modification Program, but it expired at the end of 2016. Now, Fannie Mae and Freddie Mac have a foreclosure-prevention program, called the Flex Modification program, which went into effect Oct. 1, 2017. If your mortgage is owned or guaranteed by either Fannie or Freddie, you may be eligible for this program.

 

The federal Home Affordable Refinance Program, or HARP, helped underwater homeowners refinance into a more affordable mortgage. HARP has also expired. Fannie Mae’s High Loan-to-Value Refinance Option and Freddie Mac’s Enhanced Relief Refinance replaced HARP in 2019.

How to get a mortgage loan modification

If you are struggling to make your mortgage payments, contact your lender or servicer immediately and ask about your options. Avoiding phone calls or procrastinating will only make matters worse. The loan modification application process varies from lender to lender; some require proof of hardship, and others require a hardship letter explaining why you need the modification. If you’re denied a loan modification, you can file an appeal with your mortgage servicer. Consider working with a HUD-approved housing counselor, who can assist you for free in challenging the decision and help you understand your options.

 

Note: NHSIE is a HUD Approved Housing Counselor Agency, that can provide forbearance and or loan modification information and or assistance.

Know before you modify

One potential downside to a loan modification: It may be added to your credit report and could negatively impact your credit score. The resulting credit dip won’t be nearly as negative as a foreclosure but could affect your ability to qualify for other loans for a time.

Be aware that, depending on how your loan is modified, your mortgage term could be extended, meaning it will take longer to pay off your loan and will cost you more in interest.

But for homeowners on the brink of losing their homes, the benefits of a loan modification can far outweigh the potential credit risks and extra interest.

A loan modification is a change made to the terms of an existing loan by the lender.  It may involve a reduction in the interest rate, an extension of the length of time for repayment, a different type of loan, or any combination of the three.

During the past economic recession, there were modifications programs developed in part by mortgage providers and servicers who were supported by the federal government to assist families that were experiencing financial hardship and had fallen behind on their monthly mortgage payments. These programs consisted of Making Home Affordable and Keep Your Home California among others. These modification foreclosures prevention programs were offered to millions of families for years, but like all good thing they come to an end, which is to say that many of these programs are no longer available to families that are facing a financial hardship and are currently or soon will be behind on their monthly mortgage payments (Default).

Because of the lack of mortgage assistance programs being offered to homeowners and the increase number of homeowners falling behind on their monthly mortgage payments, there is and will be an increased amount of properties going to foreclosure, unless homeowners seek assistance within the first couple of months of not paying their monthly mortgage payment.  Click Here for more information on available programs

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Who is NHSIE

NHSIE is servicing consumers, families, and communities with their homeownership challenges for many years with great success in San Bernardino, Riverside, San Diego, Orange and Los Angeles Counties.

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NHSIE helps fill the void of information and or assistance needed by homeowners that lack the knowledge or resources needed to explore the possibility and opportunities of receiving a forbearance, modification, other foreclosure prevention, or homeowner retention options. 

In addition, NHSIE provides the information homeowners need regarding the terms, conditions and future ramifications of a mortgage forbearance, loan modification, and other home retention programs that their mortgage companies are offering and approving. 

NHSIE is servicing consumers, families, and communities with their homeownership challenges for many years with great success in San Bernardino, Riverside, San Diego, Orange and Los Angeles Counties.

NHSIE helps fill the void of information and or assistance needed by homeowners that lack the knowledge or resources needed to explore the possibility and opportunities of receiving a forbearance, modification, other foreclosure prevention, or homeowner retention options. 

In addition, NHSIE provides the information homeowners need regarding the terms, conditions and future ramifications of a mortgage forbearance, loan modification, and other home retention programs that their mortgage companies are offering and approving. 

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Forbearance Programs

How does mortgage forbearance work?

To request forbearance, you’ll have to contact your lender. Lender qualifications can vary, and the type of mortgage you have can also determine what options you’re offered.

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If you qualify for forbearance, your lender will work with you to set up a forbearance agreement. Terms can include:

· The length of the forbearance period

· The amount of payment required during the forbearance period

· Whether the lender will report the forbearance to credit bureaus

· How you’ll repay the lender after the forbearance period ends

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

When the forbearance period ends, you’ll have to pay your lender back according to previously arranged terms. There are several options for making up the missed amount. With reinstatement, you repay with a lump sum. A repayment plan spreads the payments you missed over an allotted time period by adding a set amount to your regular monthly payment. Another option is to add the repayment amount to the end of the mortgage, lengthening its term.

If your financial hardship lasts longer than you had anticipated, or you don’t have the funds for a reinstatement or repayment plan, ask your lender about a mortgage loan modification. A loan modification changes the terms of your mortgage to help make your payments more manageable.

 

How long does mortgage forbearance last?

Mortgage forbearance is intended to provide relief while you’re dealing with a short-term financial problem, so it generally does not last more than one year.

Some lenders will ask you to provide them with updates during the forbearance period. If it looks like you will need an extension or a different type of assistance, your lender can explain your options. » MORE: Ways to reduce your mortgage payment

How do I qualify for mortgage forbearance?

Qualification requirements for mortgage forbearance vary by lender, but in most cases you’ll start by submitting an application. Some lenders allow you to start with an online application; others ask that you call them first. You’ll want to have a few items on hand:

· Your most recent mortgage statement.

· An estimate of your current monthly income.

· An estimate of your current monthly expenses.

· An explanation of your hardship (and, if possible, documents that substantiate your claim).

It’s best to start the process early rather than waiting until you’re about to miss a payment. Some lenders may require you to request assistance within a certain amount of time following an event, like a natural disaster, or a change in circumstances, like filing for unemployment.

If your request for mortgage forbearance is denied, you have the option to formally appeal the decision with your lender. Your application will then be reviewed by a new loan officer (not someone involved in the initial decision), and you’ll receive an updated decision.

How to get mortgage forbearance

Contact your lender or mortgage servicer in order to apply for mortgage forbearance. The phone number on your monthly mortgage statement is a good place to start. You can also check your lender’s website for online resources.

If you want unbiased financial advice about your situation, consider talking to a housing counselor approved by the Department of Housing and Urban Development. You can find a counselor near you on the HUD website. They can weigh in on whether forbearance is the right choice for your situation and explain how different repayment plans would work

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Click here for more information on available programs.

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Client Testimonials

Because It’s Our Clients That Matter The Most.

Best experience ever!

After being under loss mitigation with my bank and being denied, I reapplied  for a loan modification and KYHC.

Within two months I was approved for assistance and even my bank offered a loan modification,

Professional & compassionate

My experience with this organization was the BEST!! They were very patient with my father and helpful to every single scenario!

At last his loan modification was approved!

Answered my questions

I was referred to NHSIE by 211/California. I was facing foreclosure and didn’t know where to start.  Fabian Casarez was extremely helpful. He understands the industry, works tirelessly for his clients and is very honest.  The level of professionalism and knowledge that Fabian and his team has is very hard to find.  Your will be glad you called!

NHSIE

Home Retention Options

Mortgage reinstatement, loan modifications, forbearance agreements, and payment arrangements.

We work with you on identifying the various qualifying factors which consist of income, monthly expenses, and hardship.

We can help you enter all of your data into your loan modification packet, make sure that all the i’s are dotted and t’s crossed so there is less chance of your packet being rejected due to it’s incompleteness or inaccurate information.  We will advise you on what to expect and how the process works for your individual situation.

NHSIE

Other Foreclosure Prevention Options

There are several options that could help you retain your home. To determine which might best suit your
needs, please review the following:
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Repayment plan

A repayment plan allows you to pay your regular monthly payment plus additional funds applied to past-due amounts. Payments are distributed over an agreed-upon period of time.

This option may work for you if:

  • You can afford your regular monthly payments and other expenses.
  • You have surplus funds at the end of the month.
Hardship loan modification
This option allows you to roll interest and escrow shortage from delinquent payments into the existing loan. You may qualify for an interest-rate reduction to have the term of the loan extended.

This option may work for you if:

  • You can afford your regular monthly payment or a slight increase in your payment, plus other monthly expenses.
  • You don’t have substantial funds left at the end of the month.
Options regarding selling your home

If you face the possibility of selling your home, ask yourself the following before starting the process:

  • Are you prepared to sell your home?
  • Are you unable to recover from a situation that caused you to fall behind on your mortgage payments?
  • Are you unable to afford your regular monthly payment and have no means to catch up on delinquent payments?
  • Make sure you work with a real estate professional that understands and can explain the default / foreclosure process and the importance of timelines

If you decide to sell your home and don’t have enough equity in your home, consider the following options.

Short sale

WHAT IS A SHORT SALE?
A short sale in real estate is when a lender allows a homeowner to sell their home for less than the debt owed on the mortgage. By working with the right listing agent, many homeowners are able to have all their debt forgiven.

SHORT SALE VS. FORECLOSURE
A short sale is the best option for many homeowners who are underwater on their mortgage payments, and have been unsuccessful getting their loan rates refinanced or reduced to an affordable rate. In both a short sale and a foreclosure the property is lost, however, a short sale only affects one’s credit for two years. A foreclosure, on the other hand, will negatively impact your credit for seven or more years. Another benefit of a short sale is that many banks and government programs offer financial assistance with completing the sale and moving costs. Those who are foreclosed on don’t receive that type of assistance.

HIRE A QUALIFIED SHORT SALE AGENT
Choosing the right short sale agent is imperative. Their job entails much more than slapping the listing into MLS and throwing up a For Sale sign; they will be handling negotiations with the bank. If the short sale agent has inadequate experience dealing with loss mitigation and negotiators, the seller will be the one who suffers in the long run.

An experienced agent will be much better suited to negotiate with a lender, because not all lenders handle short sales the same way. The right agent can assure that you will pay little to nothing when selling your home, and their sales commissions are paid by the bank, not the buyer or seller.

ShortSaleAgentFinder.com allows you to search for the closest short sale agents in your neighborhood, and view and compare their short sale profiles, so that you can make an informed choice when choosing who to work with.

WHAT IS A SHORT SALE?

A short sale happens when a homeowner owes more on his mortgage than his home is worth in today’s fair market value. Therefore, the home is underwater, or upside down. A homeowner’s real estate agent then negotiates with the owner’s bank to accept less than the balance of the mortgage. For example, if a home is only worth $400,000 but the owner has a mortgage balance of $500,000, then he will be $100,000 “short” when he goes to sell his home.

DO I QUALIFY FOR A SHORT SALE?

In order to qualify for a short sale, you must show that you are experiencing some kind of financial hardship. For example, if your income has dramatically dropped, or you have lost your job, or you are a few payments late on your mortgage and having trouble keeping up. In other words, if you’re on a steady road to foreclosure, then you are very likely a perfect candidate for a short sale. Also, the home must be worth less than the balance of your mortgage.

WHAT IS THE SHORT SALE PROCESS?

The first step in pursuing a short sale is speaking with a knowledgeable short sale agent who can run a home evaluation of your property and determine if you qualify for a short sale. Next, your home will be marketed for sale, and buyers will present you and your agent with offers. You will accept the highest offer and your agent will submit that offer, along with your short sale application to your lender. The process can take anywhere from 1-4 months, depending on your lender. In many cases, you can complete a short sale with little or no cost out of pocket. This is why it’s so important that you work with a short sale specialist, and not just any agent you know.

WHAT ARE THE BENEFITS OF A SHORT SALE?

There are so many benefits to doing a short sale compared to the alternative of being foreclosed on.

For starters, when you go through a successful short sale, your credit is only affected for around two years. That means you can rent for a couple of years and then you can buy another home and you’re right back to home ownership. If you are foreclosed on, that hits your credit very hard for around seven years! Also, many banks are now offering homeowners move out financial assistance to cooperate with the short sale, which means they will sometimes pay you to move. Don’t expect that kind of treatment with a foreclosure proceeding.

MORE INFO ON YOUR SHORT SALE

Since every situation is different, we recommend you speak to a short sale specialist that works your market area. Every state has different rules and tax implications. Consult short sale specialist to see if a short sale is right for you.

 

 

The Process for Buying a Short Sale Home

SHORT SALES WORK A DIFFERENT WAY
Purchasing a short sale is very different from buying a regular traditional sale. The main reason is because in a short sale, the market value of the home is less than what is owed to the seller’s lender. During a short sale transaction, the brokers negotiate with the lender to accept a “short” payoff on the loan, and in most cases, forgive the debt altogether. Buyers should be aware that completing a short sale purchase (closing escrow) can take anywhere from 1 month to 6 months or more, depending on the holders of the liens. For example, if the seller only has one mortgage, it is much easier than if he has two mortgages, since each loan has to be negotiated down separately. That’s why working with an experienced Short Sale expert agent is so important.

WORK WITH A QUALIFIED SHORT SALE SPECIALIST!
Short sales require some extra skills from the real estate agents handling them. Every bank has their own procedures, with different documentation they require. Working with an experienced agent is a sure way to increase your chances for success. A qualified short sale agent has experience negotiating with bank managers on your behalf, and can make your case stronger, helping you secure the best possible price.

 

Short Sale agents across the country are a special breed of specialized real estate professionals who can help you short sale your home with the least amount of hassle possible. This is because they understand the process the banks expect to close short sales quickly and successfully. Not every transaction is the same, and this could not be more true in the short sale world. Many properties have both a first and second mortgage, HOA liens, mechanics liens, and unpaid taxes among other issues. To get these properties to a successful closing with clean title often requires the help of a dedicated short sale agent.

The key is also to work with somebody that understands each bank and their expectations. Your agent should know exactly what kind of a package to put together for each bank involved in the transaction. Bank of America is going to expect something different from Chase or Wells Fargo. There are so many details involved that it is usually a bad idea for a home owner to take on the job of negotiating their own deal. In fact, those looking to buy short sales should be wary of doing business with a seller that is not open to using a professional short sale negotiator because it will usually lead to frustration or even worse. There is a reason that there are high level short sale certifications and other industry designations. It is because this is a tough job only meant for those who are true students of the art of closing short sales.

The featured members you see in this short sale are people that have made a personal commitment to giving the short sale industry a good name and serving the best interests of buyers and sellers. These are high level people dedicated to their craft. With short sales on the rise and foreclosures on the decline, it will be more important than ever going forward with those individuals that have the expertise and experience needed for an efficient and strain line short sale service. (DRE#01379670)

Deed in lieu of foreclosure

This option allows you to deed your home back to your lender or investor instead of facing foreclosure.

This option may work for you if:

  • You can’t afford your regular monthly payment or a slight increase in your payment, plus other monthly expenses.
  • You don’t have substantial funds left at the end of the month.
  • Consult with your mortgage company, a non-profit, attorney, and or an informed realtor of the long-term ramifications of this option

NHSIE

Free Forbearance & Loan Modification Services

Let us guide you through the maze of the loan modification process. We have expert-trained personnel to walk you through the steps from gathering all of your paperwork and financial documents, to submitting your loan modification packet to your lender!

Find Out About Loan Modification Options:

 

What Happens When You Modify Your Mortgage?

The modification is a type of loss mitigation.  The modification may reduce your monthly payment to an amount you can afford.  Modifications may involve extending the number of years you have to repay the loan, reducing your interest rate, and may even reduce your principal balance.

How To Get A Mortgage Modification!

 We offer our assistance, expert guidance and advice along the modification process.  We also assist in the

negotiations with your lender, all for FREE!

Start with a phone call or online inquiry to the lender. Be honest and explain why it’s hard for you to make your mortgage payments right now. Then, let your lender know about your proposed adjustment to the mortgage. 

Lenders will generally require a loss mitigation application and details about your finances to evaluate your request, and some will require that you also be delinquent with your mortgage payments, often by up to 60 days.  Be prepared to provide certain information:

    • Income: This is how much you earn and where it comes from.
    • Expenses: Be prepared to share how much you spend each month, and how much goes toward different categories, such as housing, food, and transportation.
    • Documents: You’ll often need to provide proof of your financial situation, including pay stubs, bank statements, tax returns, and loan statements.
    • A hardship letter: Explain what happened that affects your ability to make your current mortgage payments, and how you hope to or have rectified the situation. Your other documentation should support this information.

  • IRS Form 4506-T: This form allows the lender to access your tax information from the Internal Revenue Service (IRS) if you can’t or don’t supply it yourself.

Confused About The Loan Modification Process?

FREE Loan Modification Assistance

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Top Reasons Why Loan Modifications are Denied:

Reason #1: Your Application is Incomplete

The most common reason that loan modification requests are denied are incomplete applications. If you leave out a single signature or loan number, the lender will deem your entire application incomplete. Often a modification request is in underwriting review for several months, during which time you will need to update the file with additional paystubs, bank statements, etc. If the New Year passes, you will need to provide another tax return. In addition, you must continually update the lender with changed circumstances, like an increase or decrease in income. The best way to cure a documentation deficiency is to ask the lender, “What do you need to complete the file?” and then to promptly provide whatever is missing. NHSIE can assist in providing assistance to complete your loss mitigation package and curing any deficiencies, for free!

Reason #2: You Do Not Meet the Lender’s Standard for “Hardship”

An essential part of your loss mitigation package is the financial hardship letter (or “letter of hardship”). A hardship letter explains the circumstances that caused you to fall behind on your mortgage payments. You must prove to your lender that you defaulted for a good reason. Your financial hardship must be real, like job loss or a medical emergency. You must fully and succinctly explain why you were unable to pay your mortgage. If at all possible, provide documentation sufficient to prove your hardship. that you have actually undergone financial hardship.

Reason #3: You Missed a Trial Modification Payment

Your lender may offer you a three-month trial modification. If you make all three trial modification payments, then your lender will make your modification permanent. However if you miss one of those payments (or pay one of them late), then you have defaulted on the trial modification terms and will be denied a permanent loan modification.

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Frequently Asked Questions

Doesn’t The Bank Have To Give Me a Loan Modification?

No the bank is under no obligation to extend a loan modification to you.  A loan modification is just one of several options the bank may consider when you fall behind on your payments.  The other options for the bank are a forbearance, deed in lieu, short sale or foreclosure.  Call us for more details on your options.

 

What IS The Key To Getting a Loan Modification?

Pay attention to details

First, you have to make sure you understand everything your mortgage servicer wants from you and fill out all the forms properly. Read all the instructions, collect and submit all the documents they request. If something isn’t clear or you just don’t understand it, contact NHSIE and ask for help. Improperly completed forms and missing documentation are two of the major reasons lenders cite for loan modifications being denied.

OR CALL US NOW AT 800-555-1212

OR CALL US NOW AT (888) 282-8296

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Market Information/Education

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Fannie Mae announces new Extend Modification for Disaster Relief

Fannie Mae’s most recent Lender Letter LL-2017-09 provides more clarification on policies related to disaster relief, which includes additional details for servicers on how to evaluate borrowers for workout options after a disaster-related forbearance. In addition, the Lender Letter introduces the Fannie Mae Extend Modification for Disaster Relief, a new post-disaster forbearance modification developed jointly with Freddie Mac and the Federal Housing Finance Agency (FHFA).
The new Extend Modification for Disaster Relief results in a fixed-rate modification that extends the mortgage loan term in monthly increments to match the number of delinquent payments, not exceeding 12 months. This modification is designed for borrowers who were current or less than 31 days delinquent at the time of the disaster and meet the eligibility requirements as outlined in the Lender Letter. Servicers are encouraged to implement the Extend Modification for Disaster Relief immediately but must begin evaluating borrowers for this new modification program no later than February 1, 2018.
As part of the Lender Letter, Fannie Mae has established guidance to servicers to evaluate borrowers that are unable to become current on their mortgage loans after post-disaster forbearance relief and subsequently require a modification when the property securing the mortgage loan or the borrower’s place of employment is located in a FEMA Declared Disaster Area eligible for Individual Assistance. This guidance provides the hierarchy of modifications for which servicers must evaluate borrowers and the factors servicers should take into consideration in their evaluation. These factors include:
Was the servicer able to establish a Quality Right Party Contact (QRPC)1 with the borrower during the disaster forbearance period?
Can the borrower maintain current contractual principal, interest, taxes, and insurance?
Can the borrower manage any additional escrow repayment obligation?
Upon reviewing the required factors, the servicer will work with the borrower to determine the appropriate post-disaster-related forbearance plan modification. The below information illustrates the hierarchy of the modifications for consideration and describes the corresponding steps that are taken for each modification program that Fannie Mae makes available to those impacted by a disaster event.

Cap & Extend Modification 

  • This workout option allows a homeowner to capitalize the delinquency including unpaid interest and advanced escrow payments (taxes and insurance) into the mortgage balance while extending the term (maturity date) in monthly increments to ensure the payment amount established is in line with the original mortgage payment prior the hardship.
  • With this modification, the interest rate may stay the same depending on if the homeowner has an ARM or fix rate loan, and the market loan-to-value (MTMLTV). The term would be extended to achieve a payment equal to or less than the pre-modified payment. 
  • A borrower response packet is not required for this workout, but the servicer must establish Quality Right Party Contract (QRPC) to confirm the payment is affordable.
  • For many homeowners facing COVID-19, they have the ability to keep making the regular contractual payment once they are back to work and this option may make sense (example: their place of employment was closed for 3 months and now is back up running with no impact to their wages).

Extend Modification 

  • A Fannie Mae Extend Modification allows a homeowner to extend the term of their loan (maturity date) by the number of miss payments
  • Example: a homeowner with 20 years (240 payments) left on a 30-year mortgage and is 6 months past due would now have 246 payments left (240+6).
  • The homeowner will need to replay any miss escrow payments (taxes & insurance) over a period of time (can be spread up to 5 years).
  • The interest rate would stay the same if the homeowner has a fix rate loan and would be changed if an ARM.
  • A borrower response package is not required for this workout, but the servicer must establish Quality Right Party Contact (QRPC) to confirm the payment is affordable. 

Flex Modification 

  • A Fannie Mae Flex Modification allows a homeowner to capitalize the delinquency into the mortgage balance while extending the term (maturity date) to 480 months (number of payments) and the ARM loans, potentially adjusting the interest rate and potentially providing principal forbearance.
  • With this modification, the interest rate would stay the same if the homeowner had a fix rate loan and would be changed if an ARM. This mod targets a 20% payment reduction. 
  • With the Flex Modification, a Borrower Response Packet must be completed if the mortgage loan is less than 90 days (3 months) delinquent after forbearance. However, if 90 days (3 months) or more delinquent, a Borrower Response Packet is not required nor QRPC.
  • Unlike with the first 2 modification options, this workout gives homeowners the best chance at a lowered payment, which may be important for those facing long term income impacts related to   COVID-19

For Connecticut Avenue Securities™ (CAS) transactions, the Extend Modification for Disaster Relief will not result in modification loss amounts being passed through to investors. Under our current policy, as with any other modification, a loan must be removed from the MBS trust before any permanent modification is completed. Full details on the Fannie Mae Extend Modification for Disaster Relief and additional details on policies related to disaster relief can be read here.

Freddie Mac: Lump Sum Repayment is Not Required in Forbearance
Freddie Mac reiterates repayment policies in the wake of COVID-19
MCLEAN, Va., April 27, 2020 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today reiterated that borrowers in forbearance living in homes owned by the company have many options to repay missed payments and are never required to choose doing so in one lump sum.
Freddie Mac CEO David Brickman made the following statement:
“Simply put, if you are a homeowner seeking forbearance and Freddie Mac owns your loan, you are never required to make up missed payments in a lump sum. Our policies offer a number of options to bring borrowers current, including repayment plans, resuming normal payments or lowering your monthly payment through a modification. We encourage homeowners facing hardship to work with their servicer to identify the plan that’s appropriate for their unique situation.”
In March, Freddie Mac announced it was taking a number of actions to assist homeowners facing financial hardship due to COVID-19. These include forbearance, during which a borrower’s payments are reduced or suspended. While borrowers in forbearance must repay the missed payments, full repayment immediately following forbearance is just one of many options, and they are never required to do so.
Owners facing a hardship are entitled to up to 12 months of forbearance. Servicers will start with a shorter plan and reassess to see if an extension for up to 12 months is necessary. Once the hardship has been resolved, there are several options for borrowers to repay the money owed, including:
Full repayment, known as reinstatement, where you pay back the missed payments and quickly get back on track.
A repayment plan, which allows borrowers to catch up gradually in addition to paying regular monthly payments.
Payment Deferral or modification of the loan, to keep monthly payments consistent and add the borrower’s missed payments to the end of the mortgage.
Modification of the loan, to reduce a borrower’s original monthly payment amount.
Loan servicers will reach out about 30 days before the initial forbearance plan is scheduled to end to determine which assistance program is best or if additional forbearance is needed. Borrowers who believe they are not being offered proper repayment options can reach out to the Consumer Financial Protection Bureau.
COVID-19 Servicing-related Frequently Asked Questions (FAQs)
What is Freddie Mac doing to help ensure homeowners can remain in their homes during this critical time?

As stated, we’re taking action to assist Servicers in helping homeowners in a variety of ways, including:

§ Providing mortgage forbearance for up to 12 months,

§ Waiving assessments of penalties and late fees,

§ Suspending all foreclosure sales until May 17, 2020,

§ Offering loss mitigation options that lower payments or reinstate the mortgage to “current” status while keeping payments the same after the forbearance period.

What do we do if a customer (homeowner) becomes ill with COVID-19?

§ Any financial hardship that impacts the homeowner’s ability to make mortgage payments as a result of COVID-19, including illness to the homeowner or a dependent, is an eligible hardship that would qualify them for forbearance and/or consideration for other Freddie Mac loss mitigation offerings.

Do I still need to send interest payments for homeowners impacted by COVID-19?

Servicers must complete their normal remittance requirements, including advancing of scheduled interest payments until the loan becomes inactivated.

Are there any COVID-19-related servicing measures available to assist homeowners who may be facing hardships due to the pandemic?

As announced in the Guide Bulletin and as updated bulletin under direction of Federal Housing Finance Agency (FHFA) and in alignment with Fannie Mae, the following temporary servicing measures will be available to support you in your efforts to assist impacted homeowners:

§ Credit reporting requirements

§ Forbearance plans*

§ Loan modifications

§ Foreclosure moratorium

§ Acceptable outreach methods/requirements for establishment of quality right party contact (QRPC)

§ Bankruptcy motions for relief from automatic stay.

This includes both homeowners who have and have not contracted COVID-19, provided their ability to make timely Mortgage payments has been negatively affected as a result of a COVID-19-related hardship.

*Freddie Mac has authorized Servicers to approve forbearance plans for all homeowners who have a COVID-19-related hardship, regardless of property type, as well as temporarily waiving our 12-month delinquency cap on forbearance plans, and other requirements as described in Bulletin 2020-4 and 2020-10.

What is the effective date for these measures?

All of the temporary policies and programs we have put specifically in place in response to COVID-19 are effective immediately. Freddie Mac has been monitoring the situation, resulting in additional updates to credit reporting and forbearance plan requirements, as described in Bulletin. Going forward, we will continue to monitor the situation and may revise or revoke this temporary guidance at any time, as appropriate.

Will there be any relief for property inspections during the COVID-19 national emergency?

As communicated in Guide Bulletin, we are temporarily relieving Servicers from their responsibility to:

§ Complete property inspections related to the insurance loss settlements process

§ Complete property inspections for delinquent mortgages

§ Adhere to the property preservation requirements for abandoned properties.

Will Freddie Mac suspend foreclosures for borrowers impacted by COVID-19?

Freddie Mac is now requiring that the Servicer suspend foreclosure-related activities on properties that are not vacant or abandoned in accordance with the requirements in the CARES Act

Extending help to homeowners impacted by COVID-19

If you’re struggling to make your mortgage payments due to COVID-19, relief options are available.

 

If you are a homeowner experiencing financial hardship directly or indirectly related to Coronavirus (COVID-19) and your mortgage is owned by Freddie Mac, contact your loan servicer (the company listed on your mortgage statement) right away to discuss your options.

Whether you’re facing job loss, reduced income, illness or other issues that impact your ability to make your monthly mortgage payment, Freddie Mac is working to ensure you are protected. In fact, the company has directed your loan servicer to provide mortgage relief options that include:

· Ensuring payment relief by providing forbearance for up to 12 months

· Waiving assessments of penalties or late fees

· Halting all foreclosure actions and evictions of borrowers living in homes owned by the company until at least May 17, 2020

· Offering loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period

Borrowers are eligible for forbearance regardless of whether their property is owner occupied, a second home or an investment property.

If you are struggling to make your mortgage payments or believe you may fall behind on your payments soon, don’t wait – contact your loan servicer now. They’re here to help you.

How does mortgage forbearance work?

How does mortgage forbearance work?

To request forbearance, you’ll have to contact your lender. Lender qualifications can vary, and the type of mortgage you have can also determine what options you’re offered. If you qualify for forbearance, your lender will work with you to set up a forbearance agreement. Terms can include:

· The length of the forbearance period

· The amount of payment required during the forbearance period

· Whether the lender will report the forbearance to credit bureaus

· How you’ll repay the lender after the forbearance period ends

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

When the forbearance period ends, you’ll have to pay your lender back according to previously arranged terms. There are several options for making up the missed amount. With reinstatement, you repay with a lump sum. A repayment plan spreads the payments you missed over an allotted time period by adding a set amount to your regular monthly payment. Another option is to add the repayment amount to the end of the mortgage, lengthening its term.

If your financial hardship lasts longer than you had anticipated, or you don’t have the funds for a reinstatement or repayment plan, ask your lender about a mortgage loan modification. A loan modification changes the terms of your mortgage to help make your payments more manageable.

 

How long does mortgage forbearance last?

Mortgage forbearance is intended to provide relief while you’re dealing with a short-term financial problem, so it generally does not last more than one year.

Some lenders will ask you to provide them with updates during the forbearance period. If it looks like you will need an extension or a different type of assistance, your lender can explain your options. » MORE: Ways to reduce your mortgage payment

How do I qualify for mortgage forbearance?

Qualification requirements for mortgage forbearance vary by lender, but in most cases you’ll start by submitting an application. Some lenders allow you to start with an online application; others ask that you call them first. You’ll want to have a few items on hand:

· Your most recent mortgage statement.

· An estimate of your current monthly income.

· An estimate of your current monthly expenses.

· An explanation of your hardship (and, if possible, documents that substantiate your claim).

It’s best to start the process early rather than waiting until you’re about to miss a payment. Some lenders may require you to request assistance within a certain amount of time following an event, like a natural disaster, or a change in circumstances, like filing for unemployment.

If your request for mortgage forbearance is denied, you have the option to formally appeal the decision with your lender. Your application will then be reviewed by a new loan officer (not someone involved in the initial decision), and you’ll receive an updated decision.

How to get mortgage forbearance

Contact your lender or mortgage servicer in order to apply for mortgage forbearance. The phone number on your monthly mortgage statement is a good place to start. You can also check your lender’s website for online resources.

If you want unbiased financial advice about your situation, consider talking to a housing counselor approved by the Department of Housing and Urban Development. You can find a counselor near you on the HUD website. They can weigh in on whether forbearance is the right choice for your situation and explain how different repayment plans would work

All You Need to Know About Mortgage Loan Modifications

All You Need to Know About Mortgage Loan Modifications

Loan modification changes the terms of your mortgage so it’s more affordable, but it could affect your credit and the amount of interest you’ll pay.

 

If you’re struggling to make your monthly mortgage payments or have fallen behind, you may be at risk of losing your home. But depending on the circumstances, you may be eligible for a loan modification, which can make it easier to stay on top of mortgage payments and avoid foreclosure.

If you’re in this position, here’s what to know about getting a mortgage loan modification.

What is a loan modification? A loan modification is different from refinancing your mortgage. Refinancing entails replacing your loan with a new mortgage, whereas a loan modification changes the terms of your existing loan.

How does loan modification work?

Getting a mortgage loan modification could mean extending the length of your term, lowering your interest rate or changing from an adjustable-rate mortgage to a fixed-rate loan. Though the terms of your modification are up to the lender, the outcome is lower, more affordable monthly mortgage payments. Foreclosure is a costly process for lenders, so many are willing to consider loan modification as a way to avoid it.

Who qualifies for a loan modification?

Not everyone struggling to make a mortgage payment can qualify for a loan modification. In general, homeowners must either be delinquent or facing imminent default, meaning they’re not delinquent yet, but there’s a high probability they will be.

Reasons for imminent default include the loss of a job, loss of a spouse, a disability or an illness that has affected your ability to repay your mortgage on the original loan terms.

 

Types of loan modification programs

Some lenders and servicers offer their own loan modification programs, and the changes they make to your terms may be either temporary or permanent.

If your lender or servicer doesn’t have a program of its own, ask if you are eligible for any other assistance programs that can help you modify or even refinance your mortgage.

The federal government previously offered the Home Affordable Modification Program, but it expired at the end of 2016. Now, Fannie Mae and Freddie Mac have a foreclosure-prevention program, called the Flex Modification program, which went into effect Oct. 1, 2017. If your mortgage is owned or guaranteed by either Fannie or Freddie, you may be eligible for this program.

 

The federal Home Affordable Refinance Program, or HARP, helped underwater homeowners refinance into a more affordable mortgage. HARP has also expired. Fannie Mae’s High Loan-to-Value Refinance Option and Freddie Mac’s Enhanced Relief Refinance replaced HARP in 2019.

How to get a mortgage loan modification

If you are struggling to make your mortgage payments, contact your lender or servicer immediately and ask about your options. Avoiding phone calls or procrastinating will only make matters worse. The loan modification application process varies from lender to lender; some require proof of hardship, and others require a hardship letter explaining why you need the modification. If you’re denied a loan modification, you can file an appeal with your mortgage servicer. Consider working with a HUD-approved housing counselor, who can assist you for free in challenging the decision and help you understand your options.

 

Note: NHSIE is a HUD Approved Housing Counselor Agency, that can provide forbearance and or loan modification information and or assistance.

Know before you modify

One potential downside to a loan modification: It may be added to your credit report and could negatively impact your credit score. The resulting credit dip won’t be nearly as negative as a foreclosure but could affect your ability to qualify for other loans for a time.

Be aware that, depending on how your loan is modified, your mortgage term could be extended, meaning it will take longer to pay off your loan and will cost you more in interest.

But for homeowners on the brink of losing their homes, the benefits of a loan modification can far outweigh the potential credit risks and extra interest.

Fannie Mae Assistance Options for Homeowners Impacted by COVID-19
Forbearance Information - Fannie Mae Assistance Options for Homeowners Impacted by COVID-19

WASHINGTON, DC – Fannie Mae (FNMA/OTCQB) wants to help ensure families are given options in these uncertain times in the case of job loss, a reduction in work hours, illness, or other issues. We want to remind those impacted by COVID-19 of available mortgage assistance and relief options. Under Fannie Mae’s guidelines for single-family mortgages:

Homeowners who are adversely impacted by this national emergency may request mortgage assistance by contacting their mortgage servicer

Foreclosure sales and evictions of borrowers are suspended for 60 days

Homeowners impacted by this national emergency are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months

Credit bureau reporting of past due payments of borrowers in a forbearance plan as a result of hardships attributable to this national emergency is suspended

Homeowners in a forbearance plan will not incur late fees

After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification

Fannie Mae also offers help navigating the broader financial effects of this national emergency to homeowners with a Fannie Mae-owned mortgage through its Disaster Response Network*, including:

A needs assessment and personalized recovery plan

Help requesting financial relief from insurance, servicers, and other sources

Web resources and ongoing guidance from experienced disaster relief advisors 

Homeowners can find out if they have a Fannie Mae-owned mortgage and access to the Disaster Response Network* by visiting www.KnowYourOptions.com/loanlookup.

“Our thoughts are with everyone who may be impacted by COVID-19 and we urge you to stay safe and well during these unprecedented times. Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. We encourage residents whose employment or income are impacted by COVID-19 to seek available assistance as soon as possible,” said Malloy Evans, Senior Vice President and Single-Family Chief Credit Officer, Fannie Mae.

COVID-19 Relief Options

Homeowners and renters across the country are experiencing the financial impacts of coronavirus, or COVID-19. We’re here to help. If Fannie Mae owns your mortgage loan, or if you’re a tenant in a multifamily rental property financed by Fannie Mae, our relief options can help you feel safe at home.

Mortgage Relief for Homeowners

If you are experiencing a hardship such as job loss, income reduction, or sickness due to COVID-19 and you are no longer able to make your mortgage payment, your mortgage servicer is available to help with mortgage relief options, including:

Payment relief through a forbearance plan offers a reduction or suspension of your mortgage payments for up to 12 months, offered in increments of up to six months

Late fee relief during your forbearance plan period

Repayment options following your forbearance, including a repayment plan to catch up gradually or a permanent loan modification that aims to maintain or reduce your monthly payment

Additionally, foreclosure and eviction relief may be available through the federal CARES Act signed into law on Friday, March 27, 2020.

Contact Your Mortgage Servicer: If you’re concerned about your mortgage payments, take the first step and call your mortgage servicer—that’s the company listed on your monthly statement— to request help. Have your financial information handy when you call and note that many servicers are experiencing increased call volumes and hold times due to COVID-19.

Freddie Mac Mortgage Relief Announcement

If you are a homeowner experiencing financial hardship directly or indirectly related to Coronavirus (COVID-19) and your mortgage is owned by Freddie Mac, contact your loan servicer (the company listed on your mortgage statement) right away to discuss your options.

Whether you’re facing job loss, reduced income, illness or other issues that impact your ability to make your monthly mortgage payment, Freddie Mac is working to ensure you are protected. In fact, the company has directed your loan servicer to provide mortgage relief options that include:

Ensuring payment relief by providing forbearance for up to 12 months

Waiving assessments of penalties or late fees

Halting all foreclosure sales and evictions of borrowers living in homes owned by the company until at least May 17, 2020

Suspending reporting to credit bureaus of past due payments of borrowers who are in a forbearance plan as a result of hardships attributable to this national emergency

Offering loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period

Borrowers are eligible for forbearance regardless of whether their property is owner occupied, a second home or an investment property.

If you are struggling to make your mortgage payments or believe you may fall behind on your payments soon, don’t wait – contact your loan servicer now. They’re here to help you.

Fannie Mae and Freddie Mac

The government-controlled companies that guarantee nearly half of US mortgages, could require their second bailout in just over a decade if the US economy remains in a lockdown for several months, their regulator has warned.

The two groups, which collectively underpin the $10tn US housing market, have sufficient resources to last through a lockdown of about 12 weeks, but would then need funds from Congress or the Federal Reserve, said Mark Calabria, director of the Federal Housing Finance Agency.

“If we start to go more than two or three months, then there is going to be real stress in the mortgage market, we’re talking in terms of what happened during the great recession,” he told the Financial Times. 

“If we are talking about a drawn-out period where people are not in a position to pay their mortgages, if we are talking about 25 per cent of people having to ask for forbearance, the system doesn’t have that kind of liquidity. That would require Congress to step in, or the Fed.”

Mr Calabria’s warning underlines the potential consequences for the US economy if the current coronavirus-related shutdowns persist beyond summer, as many health experts warn.

About 300,000 borrowers had asked for forbearance on loans backed by Fannie and Freddie as of April 1, Mr Calabria said. Since the agencies make up more than 40 per cent of the mortgage market, he said that implied a total of perhaps 700,000 homeowners seeking forbearance.

He said that number was likely to rise: “A lot of people got paid for half of March, so a lot of people who were able to make their payments in March won’t be able to make their May payment.”

Below are some of the more common questions with answers that are being asked daily form homeowner’s seeking answers and or guidance

Who Qualifies for Forbearances? 

Anyone suffering financial hardship due to the COVID-19 crisis. Some servicers will take the borrower’s word / attestation, but many will request “proof” of some sort. Borrowers who are not in financial hardship should be careful about claiming they are. 

How Do I Obtain a Forbearance? 

Borrowers need to contact their servicer and apply for it. They should not simply stop making payments. Not everyone seeking a forbearance will qualify or be granted a forbearance
 

Do I Have to Pay Back Missed Payments? 

Yes, servicers will want all of the missed payments repaid as soon as the forbearance ends; some will want to restructure entire loans; and some will want to set up repayment over a period of months. Servicers will most likely try to work out the repayment system when borrowers apply for forbearances.
 

Does It Matter What Type of Mortgage I Have? 

Yes, forbearances will be easier to obtain for conforming (Fannie/Freddie), FHA and VA loans. Jumbo and non-QM borrowers, however, will have a more difficult time obtaining forbearances due to the government does not have as much influence over those entities.
 

How Will a Forbearance Affect My Credit?

 If borrowers obtain a formal approval for a forbearance, it should not affect their credit. If borrowers just stop making payments, however, without getting an approval from their servicer, it will likely impact their credit. Although credit reports will not show late payments when borrowers get their forbearances approved, future lenders will be able to see if a borrower obtained a forbearance and that could affect credit decisions in the future

Should I Go Through With My Purchase or Refinance If I Am Likely to Seek a Forbearance? 

No, not only will it be extremely difficult for borrowers to obtain a formal forbearance approval for a recently funded loan, missing payments on newly funded loans put the originating lender in extreme financial situation which may cause you to have serious ramifications.

As we get further into this crisis and more and more changes occur in our economy and with our government policies, these changes will benefit some homeowners but not all. 

HUD ISSUES NEW CARES ACT MORTGAGE PAYMENT RELIEF FOR FHA SINGLE FAMILY HOMEOWNERS

Mortgage servicers instructed to offer deferred or reduced mortgage payments by as much as 6 months to start


WASHINGTON – The U.S. Department of Housing and Urban Development today announced a tailored set of mortgage payment relief options for single family homeowners with FHA-insured mortgages who are experiencing financial hardship as a result of the COVID-19 National Emergency. Also included is an extension period for seniors with Home Equity Conversion Mortgages.

Effective immediately for borrowers with a financial hardship that makes them unable to pay their mortgage due to the COVID-19 National Emergency, mortgage servicers must extend deferred or reduced mortgage payment options – called forbearance – for up to six months, and must provide an additional six months of forbearance if requested by the borrower. This mandate implements provisions contained in the landmark Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which President Trump signed into law on March 27, 2020.

“The last thing any of us wants is for Americans to lose their homes unnecessarily while we continue to fight this invisible enemy. If you’re struggling, immediate help is now available. The FHA will continue to work with stakeholders to ensure that the loss mitigation options that are offered for both forward and reverse borrowers are appropriately tailored for the present situation,” said HUD Secretary Ben Carson.

In addition to special COVID-19 forbearance, FHA also implemented today the COVID-19 National Emergency Partial Claim, an option to be used by servicers when the COVID-19 forbearance period ends. This partial claim will help eligible homeowners who have been granted special COVID-19 National Emergency forbearance to reinstate their loans by authorizing servicers to advance funds on behalf of homeowners. The partial claim will defer the repayment of those advances through an interest-free subordinate mortgage that the borrower does not have to pay off until their first mortgage is paid off.

Further, FHA today instructed mortgage servicers to:

Delay submitting Due and Payable requests for Home Equity Conversion Mortgages by six months, with an additional six-month delay available with HUD approval; and

Extend any flexibility they may have under the Fair Credit Reporting Act relative to negative credit reporting actions.

“For American families impacted by the COVID-19 virus and unable to pay their FHA-insured mortgage, imminently losing their homes is now one less fear they should have. Today’s actions will ease the immediate pressures faced by many Americans who, through no fault of their own, are struggling with financial uncertainty,” said Assistant Secretary for Housing and Federal Housing Commissioner Brian Montgomery

Borrowers who are not currently impacted and able to make their monthly mortgage payments should continue doing so. However, those who are experiencing financial hardship as a result of the COVID-19 National Emergency should immediately contact their mortgage servicer – the entity to which they make their monthly mortgage payments – to discuss forbearance or other options that may be available to them. Borrowers who are not experiencing an income reduction due to COVID-19 are asked to avoid contacting their mortgage servicer about these options, as these questions will divert resources from serving those truly in need.

CFPB/Consumer Financial Protection Bureau - Important things to know first

 

If you’re among those financially impacted by the coronavirus pandemic, you might be concerned about how to pay your mortgage or rent. Federal and state governments have announced plans to help struggling homeowners during this time. Read this to get information on what to do now, and what your options are for mortgage and rental relief.

Important things to know first

For many homeowners with mortgages, there’s help, but first assess your situation.

If you can pay your mortgage, pay your mortgage.

Don’t call your mortgage servicer if you aren’t facing an immediate issue. Mortgage servicers are getting a lot of calls and need to first help those who won’t be able to pay their mortgage. Check their website first for possible options.

 

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer immediately.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

 

A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:

  1. A foreclosure moratorium
  2. A right to forbearance for homeowners who are experiencing a financial hardship due to the COVID-19 emergency

If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer or from your state.

Keep reading as we’ll first explain what the different options mean. Then we’ll explain how you can figure out if your lender or servicer can offer you any of the forms of assistance available.

 

Major mortgage relief options during the coronavirus pandemic

Mortgage forbearance

Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited period of time. Forbearance doesn’t erase what you owe – you’ll have to repay any missed or reduced payments in the future. If your income is restored, reach out to your servicer and resume making payments as soon as you can.

Depending on the kind of loan you have, there may be different forbearance options. If this option is available to you, read;

What is mortgage forbearance? 

Forbearance is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. You will have to pay the payment reduction or the paused payments back later.

Forbearance can help you deal with a hardship, such as, if your home was damaged in a flood, you had an illness or injury that increased your healthcare costs, or you lost your job. Forbearance does not erase the amount you owe on your mortgage. You will have to repay any missed or reduced payments.

How to request a forbearance

Call your servicer and let them know your situation immediately. Ask them what “forbearance” or “hardship” options may be available. 

Some servicers will require that you request forbearance or other assistance within a certain amount of time after a disaster or other qualifying event.

Mortgage forbearance options

Forbearance is complicated. There isn’t a “one size fits all” because the options depend on many factors. Those factors include: 

  • The type of loan 
  • The owner or investor requirements in your mortgage loan 
  • Your servicer

There are key things to consider with each type of forbearance. You’ll want to pay close attention to how your servicer expects you to pay back any missed or reduced mortgage payments. 

Here are some forbearance examples to guide you

Paused Payments Option-Paid During Existing Mortgage: Your servicer allows you to stop making payments for six months, but you must pay everything back at once when your payments are due again. 

What to consider:

  • You may owe a big bill that comes due all at once.  For example, if your servicer allowed you not to pay your mortgage for six months, at the end of the forbearance period, you may owe all six of your missed mortgage payments in one month.  
  • Interest on the paused amounts will continue to accrue until you repay them.

Mortgage Payment Reduction Option: Your servicer allows you to reduce your $1,000 monthly mortgage payment by half for three months. After the three months are over you have one year to pay back the amount of that reduction.  

What to consider: 

  • The amount of the reduction would be spread out over 12 months and added to your mortgage payment once the reduction period is over. This means your monthly mortgage will increase during that one-year period. Using the example above, you would pay $500 for three months and starting on the fourth month you would need to pay $1125.00 ($1,000 + $1500/12) each month for the next 12 months.
  • Interest on any reduced amounts will continue to accrue until you repay them.

Paused Payment Option-Paid back at End of Mortgage: Your servicer allows you to pause payments for one year, and that amount is repaid by either adding it to the end of your mortgage loan or by you taking out a separate loan. 

What to consider:  

  • You can extend the term of your loan for some amount of time to pay back the paused payments or take out a separate loan. 
  • Extending your loan means the missed payments will be added on to the end of your loan. For example if you were given a twelve month period where you didn’t have to pay your mortgage, you’ll have twelve months of payments added on to the date when your loan was supposed to be paid off by. 
  • Extending with a separate loan means when your mortgage is due you’ll also have to pay off this separate loan. This is like a balloon payment, which is one large payment due at the end of your loan.    
  • Interest on the missed amounts will continue to accrue until you repay them.

 

Moratoriums suspend or stop foreclosure

Foreclosure is when the lender takes back the property after the homeowner fails to make required payments on a mortgage. Foreclosure processes differ by state.

How does foreclosure work? 

Foreclosure processes differ by state. They are generally done in two ways. If done by filing a lawsuit, it is called “judicial foreclosure.” In some states, the lender can foreclose without going to court, and that is called “non-judicial foreclosure.” State foreclosure processes require that the borrower(s) be notified regarding the foreclosure proceedings. There are also other federal rules that may apply.

Foreclosure is when the lender takes back property when the homeowner fails to make payments on a mortgage. Foreclosure processes differ by state. 

Typically, if you fall a few months behind on your mortgage payments, the foreclosure process may begin (although the process can begin earlier or later). Don’t wait for the foreclosure process to begin. Reach out for help as soon as you think you might have trouble paying your mortgage

The foreclosure process generally may proceed in one of these ways depending on your state: 

  • Judicial foreclosure. This requires that the process go through a court where the borrower can raise defenses.
  • Non-judicial foreclosure. This is done without filing a court action and is carried out by a series of steps, including required written notices under a “power of sale” clause in the mortgage or deed of trust.

Foreclosure processes require that the borrower(s) be notified regarding the proceedings and generally involve giving public notice. State laws on giving notice and scheduling a foreclosure sale vary. Some states may also provide you with the right to mediation prior to foreclosure. Be sure to read your mail and any legal notices carefully and act promptly on notices you receive.

What options do you qualify for?

Your mortgage relief options depend on who owns or backs your mortgage. Here we’ll explain how to find out what you qualify for.

First, figure out who services your mortgage. This is who you need to contact.

HOW TO REQUEST FORBEARANCE OR OTHER MORTGAGE RELIEF 

Call your servicer.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

Have your account number handy.

Your mortgage servicer is the company that you send your mortgage payments to each month.

If you don’t know or can’t remember who currently services your mortgage, there are several ways to find out, including looking at your mortgage statement for contact information.

Second, figure out if your mortgage is federally backed.

To be eligible for protections under the CARES Act your mortgage must be federally owned or otherwise backed by one of the federal agencies and entities listed below. If you don’t know who owns or backs your mortgage, you can call your servicer. The servicer has an obligation to provide you, to the best of its knowledge, the name, address, and telephone number of who owns your loan.

Nearly half of the nation’s mortgages are owned or backed by Fannie Mae or Freddie Mac.

To look up online whether your mortgage is owned or backed by Fannie or Freddie, click these links:

CARES Act Relief Options

VIDEO: CARES ACT MORTGAGE FORBEARANCE — WHAT YOU NEED TO KNOW 

If you can’t make your mortgage payments because of the coronavirus, start by understanding your options and reaching out for help.

If your mortgage is a federally backed mortgage, you have two mortgage relief options under the CARES Act:

  • First, your lender or loan servicer may not foreclose on you for 60 days after March 18, 2020. Specifically, the CARES Act prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale, during this period of time.
  • Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request a forbearance for up to 180 days. You also have the right to request one extension for another up to 180 days. You must contact your loan servicer to request this forbearance. There will be no additional fees, penalties or additional interest (beyond scheduled amounts) added to your account. You do not need to submit additional documentation to qualify other than your claim to have a pandemic-related financial hardship.

If your mortgage is backed by Fannie Mae or Freddie Mac

In addition to the foreclosure moratorium and forbearance, if you are granted forbearance to delay making your monthly payments during this temporary period:

  • You won’t incur late fees
  • You won’t have delinquencies reported to credit reporting companies
  • Foreclosure and other legal proceedings will be suspended

Borrowers with a mortgage not backed by the federal government

If you have a mortgage loan that is not backed by one of the federal agencies or entities listed above, contact your servicer. The CFPB and other financial regulators have encouraged financial institutions to work with borrowers who are or may be unable to meet their obligations because of the effects of COVID-19.

Your servicer should help you identify alternatives that may be available to you given your specific circumstances.

Your state may also offer additional mortgage relief options

Many states are implementing or considering various mortgage relief options, including the suspension of foreclosures, as well as additional assistance for homeowners. Check your state’s government website for details.

How to request forbearance or mortgage relief

Call your servicer

You may have to wait on the line for a while to speak to your mortgage servicer because there are a lot of people in need right now. Be prepared with the following information and questions you want to ask and check their website before you call to see if there is a list provided of information you may need. Have your account number handy.

You may need to explain

  • Why you’re unable to make your payment
  • Whether the problem is temporary or permanent
  • Details about your income, expenses and other assets, like cash in the bank
  • Whether you’re a servicemember with permanent change of station (PCS) orders

Questions to ask

  • What options are available to help you temporarily reduce or suspend my payments?
  • Are there forbearance, loan modification, or other options?
  • Can you waive late fees?

Get it in writing

Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your agreement and that you’re clear on what the terms are. With some forbearance programs, you may owe all of your missed payments at one time, or additional payments at the end of the mortgage might be required, so make sure you’re familiar with the final terms.

What to do once you’ve received a mortgage relief option

While you’re in the forbearance period, or working under another mortgage relief option, there are a number of things to do to continue to protect yourself. This advice applies to both a CARES Act forbearance and other mortgage relief that you might receive.

  • Keep written documentation on hand. You want to make sure that you have this documentation available in case there are any errors on your monthly mortgage statements to ensure that your statement reflects the assistance provided.
  • Pay attention to your monthly mortgage statement. Continue monitoring your monthly mortgage statements to make sure you don’t see any errors.
  • Keep an eye on your credit. It’s a good idea to routinely check your credit reports in order to make sure there are no errors or inaccuracies. If you stop making mortgage payments without a forbearance agreement, the servicer will report this information to the credit reporting companies, and it can have a lasting negative impact on your credit history. If an error has been made, however, you can work to dispute it. Get more information about credit reporting and coronavirus.
  • Once your income is restored, contact your servicer and resume your payments. With forbearance, you still owe the payments that you missed, but fewer missed payments mean you’ll owe less down the road.
  • If you’re continuing to receive some income that turns out to be more than you need for your bills and expenses (including anything you keep paying on your mortgage), consider putting the extra money away so you can use it to pay off what’s needed later. If you can save any money now, it’ll be helpful when payments are due later.

Be aware of scams

Scammers often take advantage of vulnerable consumers during disasters and financial shocks. In addition to coronavirus-related scams, be aware of scams that falsely promise financial relief from your mortgage loan, or from foreclosure.

Here’s what to watch for as scammers may:

  • Charge a high up-front fee for their services
  • Promise to get you a loan modification
  • Ask you to sign over your property title
  • Ask you to sign papers you don’t understand
  • Tell you to make payments to someone other than your servicer
  • Tell you to stop making payments altogether
  • Promise you payments in connection with providing credit card numbers and other personal information

Protections for renters

If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. If your landlord has a federally backed mortgage or multi-family mortgage, you cannot be evicted for nonpayment of rent for 120 days beginning on March 27, 2020, the effective date of the CARES Act. After the 120-day period is up, the landlord cannot require you, the tenant, to vacate until providing you with a thirty-day notice to vacate.

If the property you rent isn’t covered by the CARES Act, many states have suspended all evictions and foreclosures due to the pandemic. Check the websites of your state government, state court , or legal aid program for details and updates.

Where to get additional help

If you need help working with your servicer or understanding your options you may want to reach out to a professional to help you with your specific situation.

HUD, If You Need Assistance in Making Your Mortgage Payments, Help is Available

If you are a homeowner with an FHA-insured single-family home mortgage and you’re having difficulty making your monthly mortgage payments due to the COVID-19 National Emergency, help is available. The three most important things you should do to protect your home investment if you have, or expect to have, a loss of income due to COVID-19:

1. Continue to make your monthly mortgage payments, if you are able to do so.

2. If you are unable to make your mortgage payment, contact your mortgage servicer — the entity to which you make your monthly mortgage payments —as soon as possible and discuss your situation with a loss mitigation specialist. Please understand that your servicers ability to respond quickly may be impacted during this National Emergency.

 

Trying to Understand Your Options? These Frequently Asked Questions Can Help

Q. I lost my job or have been furloughed due to the COVID-19 National Emergency and am worried that I cannot make my next mortgage payment. What should I do?

A. FHA has communicated to mortgage servicers that they must offer you special COVID-19 mortgage payment relief options if you are eligible.

If you are able to keep making your mortgage payments during the national emergency, it is in your best interest to do so. If you find you are no longer able to make your monthly mortgage payments, the first thing you should do is contact your servicer — the company to whom you make your monthly mortgage payments. Your servicer will be able to provide you with what is known as forbearance, a mortgage repayment option that allows you to defer or lower your monthly payments for up to six months, and an additional six month period, if needed. Your mortgage servicer can further explain the details of the FHA COVID-19 National Emergency Forbearance option — what it means now and the options for bringing your mortgage payments current in the future.

Q. I am having trouble making my mortgage payment due to the impacts of the COVID-19 National Emergency. Do I need to provide my servicer with documentation to prove I need forbearance?

A. FHA servicers will ask you to confirm that you are having a financial hardship, either directly or indirectly, due to the COVID-19 National Emergency in order to qualify for a COVID-19 Forbearance, but will not require that you supply any documents.

Your mortgage servicer can further explain the COVID-19 Forbearance and can help you figure out other options for repaying any suspended mortgage payments or the balance of reduced mortgage payments.

Q. Will the monthly mortgage payments that are reduced or suspended under a COVID-19 Forbearance need to be repaid?

A. Yes. A homeowner with an FHA-insured mortgage who receives a COVID-19 National Emergency Forbearance is responsible for repaying the suspended mortgage payments or the balance of reduced mortgage payments.

Your mortgage servicer can help you determine your options for eventually repaying any suspended mortgage payments or the balance due as a result of reduced mortgage payments. Your servicer will not charge you late fees and penalties while you are on a COVID-19 National Emergency Forbearance plan.

Q. I’m worried about making my mortgage payment in the future with all the economic uncertainty around the COVID-19 pandemic. How can I proactively address this issue?

A. Millions of U.S. homeowners are being impacted by the COVID-19 National Emergency. FHA has mortgage relief options, including the COVID-19 Forbearance, that homeowners with FHA-insured mortgages can use to defer or reduce your monthly mortgage payment, if needed. FHA continues to encourage those who can make their mortgage payments during this time to do so.

You should contact your mortgage servicer as soon as possible if you are unable to make your mortgage payments because of financial hardships from the COVID-19 National Emergency. If requested, your servicer will provide you with what is known as a forbearance, which will allow you to defer or lower your monthly payments for up to 12 months. Your mortgage servicer can further explain the details as well as options for repaying those amounts due in the future.

Q. If I go back to work after starting an FHA COVID-19 Forbearance and can make my regular mortgage payments again in less than six months, should I resume paying them?

A. Yes. Even if you received an FHA COVID-19 Forbearance, you are not required to use the full six months. It is more beneficial for you to begin making your regular mortgage payments as soon as you can reasonably do so.

If you are able to begin making your payments prior to the expiration of your forbearance, contact your mortgage servicer and let them know you are ready to resume making your regular monthly mortgage payment. Your servicer will assist you in doing so.

 

 

Q. How do I contact my servicer to let them know I want a Forbearance?

A. Maximum mortgage repayment flexibilities are being offered to homeowners with FHA-insured mortgages due to the COVID-19 pandemic. However, you must contact your servicer as soon as you think you might not be able to make your regularly scheduled mortgage payment to request an FHA COVID-19 National Emergency Forbearance.

This repayment option will allow you to defer or lower your monthly mortgage payments for up to 12 months. You can use any available means of communication to contact your servicer to request a forbearance. This includes, but is not limited to, phone calls, emails, texts, fax, mail, teleconferencing, etc.

Q. I have a Home Equity Conversion Mortgage (HECM) but have to go to a nursing home/rehabilitation facility due to COVID-19. Can I delay making the HECM due and payable so my spouse/partner/family can remain in the home?

A. Yes. To ensure that your spouse/partner/family can remain in your home, you must contact your HECM servicer, the company who manages your HECM, as soon as possible.

Upon your request, they must delay submitting a request to call your HECM due and payable.

Q: I have a Home Equity Conversion Mortgage (HECM) but can’t pay my property taxes right now. Will I lose my home?

A. No. You must contact your HECM servicer, the company who manages your HECM, as soon as possible.

Upon your request, they must delay submitting a request to call your HECM due and payable.

Q: I am having difficulty reaching my mortgage servicer. What should I do?

A. Mortgage lenders and servicers are currently working with reduced staff and capacity due to the COVID-19 pandemic. As a result, FHA suggests homeowners check with their servicer for the best way to contact them should you need to. Homeowners are encouraged to check their mortgage servicers website for contact options and updated information. Keep in mind your mortgage servicers ability to respond quickly may be impacted by COVID-19 National Emergency.

It is important to remember that only your mortgage servicer can help you with forbearance if you are affected financially by COVID-19 and cannot make your monthly mortgage payments.

 

 

 

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