Porcupine Real Estate Blog
Coronavirus Mortgage Relief: The Facts
Mortgage lenders, and the federal agencies that regulate lenders, are putting coronavirus mortgage relief measures in place to ensure homeowners have options if they’re unable to make payments.
What do you do if you need to take advantage of these relief measures? Well, your first stop should be your lender or bank. It's important to keep in mind that this is a new, ongoing process: lenders are working to figure out and implement the new mortgage relief policies outlined by the regulatory agencies.
Here's how to determine if you are eligible for mortgage relief efforts:
Federally Backed Mortgages
If you have a mortgage backed by Federal Housing Administration (FHA), Veteran’s Administration (VA), United States Department of Agriculture (USDA), Fannie Mae, or Freddie Mac, your loan servicer must offer you deferred or reduced mortgage payment options – called forbearance — for up to six months. This means you don’t have to pay your mortgage and you won’t be charged late fees, penalties, or interest while you can’t pay.
Loan servicers for FHA, Freddie, and Fannie must provide an additional six months of forbearance if you request it.
If you're not sure who backs or services your loan, Fannie Mae and Freddie Mac have loan look-up sites where you can find out who owns it, and how to get in touch with them.
Mortgages Not Federally Backed
If your mortgage is one of the 5 million in the United States not backed by a federal entity, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes a coronavirus mortgage relief mandate, doesn’t apply. But regulators have encouraged those lenders to work with borrowers who can’t pay their mortgages, and most banks and other lenders are suspending mortgage payments or offering forbearance.
The level of relief you get will depend on who owns your loan. Contact your lender to find out what’s available.
Regardless of the type of loan you have, you must apply for coronavirus mortgage relief through their mortgage servicer. That’s the entity that collects your monthly payments and decides how long the assistance will last. When you reach your mortgage servicer, you’ll need to explain your situation and provide information about your income, expenses, and assets.
Foreclosure and Evictions
Federal officials have imposed a nationwide halt to foreclosures and evictions for more than 36 million Americans with home mortgages backed by the FHA, Fannie Mae, and Freddie Mac.
The moratorium only affects borrowers with mortgages backed by Fannie Mae, Freddie Mac, FHA, VA, and RHS (Rural Housing Service loans through the USDA). This doesn’t apply to the roughly 35% of mortgages held in bank portfolios and private label securities. But some individual lenders are offering relief.
The CARES Act forbids lenders from dinging your credit score for missed payments on federally backed mortgages and student loans during your forbearance period. The federal government is also encouraging private lenders to suspend reporting late payments on eligible mortgages.
To keep close tabs on your credit, you can now obtain a free credit report from each of the three credit bureaus, Experian, Equifax, and TransUnion, every week for the next year through April 20, 2020. The companies ratcheted up their once-a-year allowance to help consumers “protect their financial health during the sudden and unprecedented hardship caused by COVID-19.”
Get all three reports in one spot: annualcreditreport.com.