Find Coronavirus Mortgage Relief Guidelines by Servicer
Coronavirus COVID-19 guidance for mortgage forbearance, loan deferment, and mortgage relief programs are being defined and updated on an almost daily basis right now. The information on this site is curated from Government and other lending authority sources to guide families to the most accurate and up to date information available. Click on your servicer for more information.
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Examples of Forbearance Repayment Options
The CARES Act requires that borrowers with a Federally backed residential mortgage loan be granted payment relief with a mortgage forbearance by simply attesting to a hardship resulting from the COVID-19 crisis.
Forbearance and reinstatement options depend on several factors. These factors include:
- The type of loan (Fannie Mae, Freddie Mac, FHA, VA or USDA)
- The owner or investor requirements in your mortgage loan
- Your servicer
There are several things to consider when requesting a forbearance. Most importantly, you need to know what options are available for paying back any mortgage payments you miss during the forbearance period. Here are 3 common examples:
Example: Your servicer allows you to stop making payments for 180 days, but you must pay everything back at once at the end of the forbearance period.
What to consider:
- NOTE: Per the CARES Act, Federally backed mortgages ARE NOT required to be paid back all at once after the forbearance period.
- You may need to document that you are no longer experiencing hardship and can pay mortgage moving forward.
- You may pay all skipped payments at once if you choose to do so.
- If paying all skipped payments at once is the only option being offered to you, make sure your loan is not Federally backed.
Example: 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.
Example: Your servicer allows you to pause payments for 360 days, and that amount is repaid by either adding it to the end of your mortgage loan or by 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 to the end of your loan. For example, if you were given a 360 day 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.
Forbearance Alternative Refinance Loan Options
These are challenging times. It's difficult to know what will come in the next several months. It's difficult to know what will happen in the next year!
It's still possible to use your home's equity to get you through these tough times. Just as forbearance has restrictions, so does the forbearance avoidance refinance loan.
If you have equity, can verify employment and income and have decent credit scores, this is an option you should consider when mapping your path forward.
A forbearance avoidance refinance loan can help you realize all of the benefits of short term mortgage relief, with the ability to reduce your rate and payment, take cash out for emergencies, or consolidate high-interest credit card debt into a single low monthly payment.
As is typical with most refinances, it is possible to skip one to two payments. It may require that you bring some money to escrow in the forms of partial payment to cover taxes and insurance.
This is not free money, you are paying the interim interest in the new loan amount. Steer clear of call center loan officers, they do not understand the complexities of timing.
An independent mortgage expert is a valuable part of your team that will help you navigate these challenging times.
Unlike forbearance programs, these skipped payments are not paid back as they are included in the transaction. It's not skipping payments, it's just smart timing that comes from working with an experienced loan officer.
If you are interested in maximizing your payment relief during your refinance transaction, make sure to discuss this with your mortgage loan officer during the very first conversation.
It could be difficult to accurately time the closing of your refinance during these challenging times because purchase transactions always take priority due to contractual obligations.
Be patient with your loan officer, and communicate often will give you the best chance at maximizing payment relief.
In times like these, it can really hit home how much monthly debt you carry. If you have more than $10k in revolving credit card debt, you're getting killed in monthly payments and interest charges.
Consolidating all of your credit cards into a single monthly payment could save you hundreds a month after skipping one to two payments going through the refinance process could save you hundreds a month.
Taking cash out for emergencies is also possible, although getting more difficult. Expect second lien holders like HELOC programs to become more and more difficult to get.
Talk to an independent mortgage expert to get honest advice about whether or not it makes sense to consolidate debt or take cash out at this time.
For instance, this is not a time to take equity out for home improvements. Not with so much uncertainty in the market.
Frequently Asked Questions
Recent guidance by FHFA and HUD has clarified that if you have a Federally backed loan, all skipped payments ARE NOT required to be paid back at once.
Servicers of non-Federally backed mortgages (approximately 30% of all mortgage) are encouraged to follow FHFA guidelines.
A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:
- A foreclosure moratorium
- A right to forbearance for homeowners who are experiencing 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.
No, You Must Contact Your Servicer - It is important that if you believe you will be unable to make your mortgage payments on time that you contact your servicer immediately and apply for mortgage payment relief.
If you do not make a payment on your mortgage and assume that it is not due because of the crisis, it will be reported as missed on your credit report and may impact your ability to take advantage of other options in the future.
Forbearance IS NOT Payment Forgiveness. Any skipped payments will be paid back in full as determined by the terms of the mortgage relief program offered by your servicer.
Please contact your servicer if you are unable to make your mortgage payments for a period of time. They will tell you what options are available for repaying any payments skipped during 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 paused payments back later.
The CARES Act suggests that an initial forbearance period of 180 days, with the ability to extend to 360 days if you are still experiencing financial hardship.
From the feedback we are getting from consumers, the most common forbearance program is 90 days, with the ability to extend to 180+ days on a case by case and servicer by servicer basis.
Remember, these payments WILL be paid back. Please make sure you get all repayment or reinstatement terms in writing to avoid surprises in the future.
If you can pay your mortgage, pay your mortgage.
If you cannot pay your mortgage, or can only pay a portion, contact your mortgage servicer immediately.
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 your servicer's website first to see what hardship relief options are available if you should need help.
Any homeowner who has suffered financial hardship including job loss, furlough, or reduced hours due to Coronavirus and cannot afford to cover their mortgage payment can consider applying for a forbearance period.
If there are other expenses that can be eliminated to offset reduced household income, those should be explored first.
A house is a homeowner’s biggest financial resource and protecting that is essential during economic hardships.
You must call your mortgage servicer and let them know if you think you will be unable to make your mortgage payments. Ask them what "forbearance" or "hardship" options may be available.
Some servicers will require that you request a forbearance or other assistance within a certain amount of time after a disaster or other qualifying event.
If your hardship has improved, you will need to bring the loan current, which is known as reinstatement. If you do not have the ability to pay the full amount owed at the time of reinstatement, you will need to work with your loan servicer to establish a repayment plan.
If you fail to meet the obligations of the repayment plan, you can apply for a loan modification. A loan modification is often the last resort but eases the financial burden by folding the delinquent payments owed into the loan amount.
You should always call your loan servicer directly to find out what options are available to you. The CARES Act only provides guidelines, but that does not necessarily reflect what will be offered to or approved for every homeowner.
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.
You can also lookup your servicer using this link to the MERS ServicerID website.
FHFA Announcement: Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (i.e. in forbearance but continued to make their mortgage payments or reinstated their mortgage).
Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
This applies to all Fannie Mae and Freddie Mac Loans.
In the opinion of mortgage experts, the better option is to allow homeowners access to their equity to repay skipped payments. There are rumors in the industry that this option may be considered.
Most servicers are not charging interest or late charges on deferred payments and will not report those payments as missed to the credit bureaus.
It is important to have this conversation with your servicer and get the terms in writing.
Loan forbearance and loan deferment are two different options that homeowners who are facing hardship can consider, but there are significant differences between the two. As outlined above, during a mortgage loan forbearance, payments are due in full when the forbearance period ends unless another payment option is agreed to with your loan servicer. Typically, a forbearance period will not exceed 12 months at a time and interest will continue to accrue during the temporary forbearance period.
A mortgage loan deferment is the delaying of payments for a defined period of time due to extenuating circumstances and is often used as a final step to avoid foreclosure. Deferment options are not available from all servicers, which can be more difficult to qualify for and may require more detailed documentation during the deferment evaluation process. During a loan deferment, a borrower delays their mortgage payments, including principal and interest, to a later date. The loan balance will be due on either the mortgage maturity date, the pay-off date or upon the sale of the property – whichever option comes first.
The length of the loan term and the payment schedule will remain the same, but the deferment period may vary based on deferment type. Each loan servicer may have multiple deferment types and since these vary from servicer to servicer, homeowners will need to contact their specific servicer to review the options available to them. Additionally, a deferment period can last up to a few years and during the deferment period, interest on the mortgage loan will not accrue. Similar to forbearance, servicers may not approve all deferment requests and they can be more difficult to qualify for.
Besides forbearance and deferment, servicers may also provide other options for homeowners experiencing hardship, such as loan modifications or repayment plans. Those options will vary from lender to lender and case by case and may require additional financial documentation from your bank or other sources to prove financial hardship in order to qualify.
As long as your mortgage payments are made within the outlined time of the forbearance period, there will be no negative impact on credit history.
However, homeowners who are only reacting to news headlines and assuming that all mortgage payments are delayed may see a negative impact on their credit if a forbearance period is not applied for and mortgage payments are missed.
Additionally, there could be further credit implications on credit score and history that are unforeseen at this time.
Because there is a lack of reporting from credit agencies about the potential impact of forbearances, homeowners should do everything they can to make their monthly mortgage payments as planned and only apply for a forbearance or deferment as a last resort.
Foreclosures for federally-backed loans, including eligible loans held by Fannie Mae, Freddie Mac, FHA, VA, and USDA are temporarily halted. It is also critical that you contact your loan servicer to discuss additional available options and the coordinating foreclosure halt time periods associated with them.
Because forbearance can be different from one servicer to the next, your servicer may have different requirements.
In order to apply for a forbearance agreement, some homeowners may need to prove how COVID-19 impacted their ability to make mortgage payments.
Other servicers may only require that you sign an affidavit stating that you have been impacted by the coronavirus.
Homeowners should contact their servicer for more details on what should be provided.
At the end of your forbearance period, all payments not made during the forbearance period will have to be paid back. We realize this will probably be a big financial burden, which is why you’ll have a few options for how to handle it:
- Start a repayment plan — Over a set number of months, an extra amount will be added to your regular mortgage payment to cover the amount you owe from the forbearance.
- Pay it as a lump sum — If possible, the simplest option is to pay back the full amount owed at one time.
- Loan modification — If you are unable to pay a lump sum or enter into a repayment plan, we will work with you on a loan modification. This may include an extension at the end of your loan giving you additional months to pay the forbearance amount.
Note: Please don’t stop making your mortgage payments until you’ve been approved for a forbearance plan. These programs are not payment forgiveness programs. They’ll require any paused payments to be repaid, so save these options for when you need them most.
If you get to the end of your forbearance period and can’t bring your balance current, you may have a few options:
- Extend the forbearance period up to 12 months in total.
- Enter a repayment plan — Over a set number of months (usually two to six), an extra amount will be added to your regular mortgage payment to cover the amount owed from the forbearance.
- Modify your loan — If you qualify, your loan’s terms (which could include interest rate, term) may be adjusted to provide an affordable payment and cover the amount owed. This may include an extension at the end of the loan giving you additional months to pay.
Yes. You can cancel your forbearance plan at any time. Just remember that when the forbearance plan ends, all payments missed during the forbearance plan will be due.
Reinstatement means that the payments that were not due during the forbearance period, were paid in full, and your account is back in good standing.
Once you're out of forbearance, you can now unlock your equity, and take advantage of lower rates, more favorable terms, or debt consolidation after weathering this storm.
It's important to get this, as well as the servicer's policy on reporting to the credit bureaus, in writing. Document everything just in case some automated system screws something up.
Valuable Free Homeowner Resources
America’s Homeowner Alliance is the first non-profit national advocacy and member benefits alliance representing the interests of current and future homeowners.
AHA gives homeowners a collective voice on housing policy and practices and offers a rewards program created to help members save money.
America's Homeowner Alliance is offering FREE lifetime membership and benefits to all homeowners impacted by COVID-19.
To claim your FREE lifetime membership Use promo code: aha2020
Please visit our site for details about how your membership makes a difference!
The key to recovering gracefully, or stronger than before is to carefully plan your next step.
FinLocker is offering homeowners a free financial locker that securely allows you to view, track, and monitor your financial health in real-time, including; income, expenses, real estate, and investments.
If required for getting your mortgage back in good standing after forbearance, sending important financial information to your lender or servicer securely is push-button easy using your financial locker.
Additional tools in this locker will help you to budget and plan your path carefully.
HOPE NOW is a non-profit dedicated to home preservation. The Alliance was encouraged in 2007 by The Dept of the Treasury and the US Dept of Housing and Urban Development to address housing challenges in local markets.
Supporting members work towards creating a unified, coordinated plan when circumstances are out of the homeowner’s control.
HOPE NOW is supporting homeowners during the COVID-19 coronavirus crisis by helping homeowners reach unresponsive servicers.
If you are unable to reach your servicer to get answers, HOPE NOW may be able to help. Complete this online form to get started.
Forbearance News, Articles, Updates & Resources
How Forbearance Impacts Mortgage Brokers and Homeowners - Association of Independent Mortgage Experts (AIME)
Guide to coronavirus mortgage relief options - Consumer Financial Protection Bureau (cfpb)
What is mortgage forbearance - Consumer Finacial Protection Bureau (cfpb)
KnowYourOptions - Forbearance - Fannie Mae
How to Get Help With Your Mortgage During the Coronavirus Pandemic - Consumer Reports
In The News