Fannie Mae and Freddie Mac issued statements yesterday addressing some confusion with regards to how homeowners are expected to pay back missed payments. In this video, I discuss their statements in more detail as well as provide you with the actual language from the Housing Wire article that provides this information.
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Fannie Mae and Freddie Mac both issued statements yesterday reiterating that homeowners are not required to pay all of the missed payments in one lump sum when their forbearance period comes to an end.
As part of the CARES Act, lenders/servicers have been required to offer forbearance to any homeowner who has been affected by covid-19 but the confusion lies in the lack of detail provided telling servicers/lenders what they should offering with regards to payment plans with the forbearance ends.
“We want every homeowner who is struggling because of this pandemic to know they have mortgage options,” Fannie Mae CEO Hugh Frater said in a statement. “We do not require a homeowner to repay missed payments all at once at the end of the forbearance plan, unless they choose to do so.”
Freddie Mac CEO stated ““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,” He also went on to say ““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,” Brickman added. “We encourage homeowners facing hardship to work with their servicer to identify the plan that’s appropriate for their unique situation.”
What is a mortgage forbearance?
A mortgage forbearance agreement is an agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her mortgage.
If you have additional questions about forbearance mortgage or the process of forbearance then please contact me directly or comment below.
Thank you for watching.
Information from today’s video came directly from Housing Wire:
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