Do you have a federally backed mortgage held either Fannie Mae or Freddie Mac and are currently in forbearance or considering forbearance? If so, then you need to watch this as Fannie and Freddie came out yesterday with some clarity on how homeowner can repay their missed mortgage payments .
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Fannie Mae and Freddie Mae came out yesterday to announce that borrowers in forbearance can defer all missed payments until the end of their loan. servicers are to begin offering this option to borrowers on July 1, 2020n. But what does that mean, how is that going to work?
Under the new program, borrowers who took forbearance due to a coronavirus-related issue will not have to repay their missed payments until the borrower sells their house, refinances their current mortgage, or their mortgage matures.
The deferral option is available to borrowers in forbearance who regain the ability to pay their mortgage on time. Under the program, the borrower simply starts making their mortgage payments again when they’re able and any missed payments are deferred to the end of their loan. This new payment deferral allows borrowers who took forbearance to shift as many as 12 months of mortgage payments to the end of their loan.
This will help borrowers keep their mortgage payment current following their hardship when other options—such as reinstatement, or a repayment plan—are not viable,” Freddie Mac said.
If a borrower chooses this new option, the principal, interest and any other expenses advanced by the mortgage servicer are deferred into a non-interest-bearing forborne balance that will become due at the end the loan.
According to Freddie Mac, the maturity date, remaining term, interest rate and payment schedule of the borrower’s mortgage remains the same as it was before.
If you have additional questions about forbearance or deferment, please comment below or contact me directly.
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