Millions of U.S. homeowners facing financial difficulties related to the COVID-19 pandemic have asked for mortgage relief or forbearance so they can temporarily suspend or reduce their monthly mortgage payments. According to mortgage data firm Black Knight, there are still around 2.6 million U.S. homeowners on an active forbearance plan through March 2021. It is important that they know their options for what happens next.
At the beginning of the pandemic, Fannie Mae, a leading provider of home loans and rental housing finance in the United States, launched an online portal at KnowYourOptions.com with interactive resources to help homeowners and tenants, including clear mortgage leniency statements when that might be an option and steps to get started.
For those still feeling the financial repercussions of COVID-19, or those new to the economic fallout, it is not too late to get help.
“We encourage homeowners and tenants facing financial difficulties to visit KnowYourOptions.com to see what options are available and to contact the mortgage company or landlord to create a plan, ”said Malloy Evans, senior vice president, Fannie Mae. “Keeping people in their homes is our number one priority.”
Black Knight says more than 800,000 forbearance homeowners will reach the end of their 12-month plan this spring. Those who are still in financial difficulties can apply for an extension of up to six more months. Homeowners interested in renewing should contact their mortgage service provider (the company they send their monthly payment to).
Those homeowners who are ready to make their monthly mortgage payments again have access to a number of options such as:
Reinstatement allows homeowners to pay missed amounts all at once if they are financially able to do so.
A repayment plan allows homeowners to continue their regular monthly mortgage payment plus an additional portion of the missed amount each month until the missed amount is paid, if they are able to do so.
Deferred payments can be a good option for those who are unable to restore or afford a repayment plan but can resume their monthly mortgage payments. This will postpone missed payments until the end of the loan term when they are repaid. There is no interest on the accrued amounts. The accrued amounts are due sooner when the property is sold or transferred, refinanced, or the loan is repaid.
Loan modification is another option where the original loan terms – such as the interest rate or loan term – could be permanently changed to better handle a homeowner’s monthly mortgage payment in the future.
A new, interactive virtual assistant at KnowYourOptions.com can provide homeowners with an informed recommendation for their financial situation that they can discuss with their mortgage service provider. Servicers will be in touch with homeowners approximately 30 days prior to the scheduled end of their forbearance plan to discuss extension and exit options.
Have any questions? Homeowners and renters looking for answers can visit Fannie Mae’s website at KnowYourOptions.com.