As American homeowners suffer economic losses due to the global pandemic, mortgage companies allowed their borrowers to pause their mortgage payments, also known as forbearance. This offers some relief and peace of mind to homeowners struggling to pay their monthly bills due to job loss or a reduction of pay.
However, in recent weeks, incorrect or misinterpreted information has caused some homeowners to panic, believing that once the forbearance period comes to an end, they will be expected to pay their missed mortgage payments back in a lump sum. An article published by HousingWire.com sets the record straight.
The article, written by Ben Lane, indicates “Fannie Mae and Freddie Mac each issued a statement Monday, reiterating that borrowers are not required to repay their missed payments all at once when their forbearance period ends.” Additionally, Lane quotes the Federal Housing Agency Director, ‘“During this national health emergency, no one should be worried about losing their home,” FHFA Director Mark Calabria said in a statement. “No lump sum is required at the end of a borrower’s forbearance plan for Enterprise-backed mortgages.”’
Its important for borrowers and lenders to understand and communicate the next steps and what will be expected of the borrower once the forbearance period comes to an end. Many lenders will offer a repayment plan, a payment deferral or a modification of the loan. The borrower should reach out directly to their lender and discuss the details of these next steps.
Read the entire article.