Federal regulators have stepped in to offer coronavirus mortgage relief
Jim Probasco
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The federal government, through Fannie Mae and Freddie Mac, is telling associated lenders to lower or suspend borrowers’ mortgage payments for up to 12 months if they have lost income because of the coronavirus outbreak. Regulators expect other lenders to follow suit.
Reduced or Paused Payments
According to the Federal Housing Finance Agency (FHFA), your individual situation will determine your eligibility, whether your monthly mortgage payment will be reduced or paused, and how long the relief will last. Both Fannie Mae and Freddie Mac are promising that in addition to reduced or suspended mortgage payments:
- You won’t be charged penalties or late fees.
- Your delinquent payments will not be reported to credit bureaus.
- Any foreclosure action against you will be suspended1
No Late Fees
Both Fannie Mae and Freddie Mac will waive all penalties and late fees for the duration of your mortgage forbearance. Interest, however, typically continues to accrue when a mortgage loan is paused.1 3
No Reporting to Credit Bureaus
Lenders are directed not to report you to credit bureaus for late or missed payments provided you are in one of the forbearance programs. This means the fact you are not making full payments or not paying at all, will not affect your credit rating.1
No Foreclosures or Evictions
On March 18, 2020, the FHFA directed Fannie Mae and Feddie Mac to suspend foreclosures and evictions for at least 60 days, provided your home loan is backed by either company. FHFA says it will continue to monitor the coronavirus situation and update policies as needed.4 Federal Housing Administration (FHA) insured mortgages are also under a 60 day order suspending foreclosures and evictions. This order was effective March 18 as well.5
Additional Help Possible
Once you reach the end of your forbearance period, you may qualify for additional assistance if you need it. Work with your servicer and, if possible, resume making your regular payments. If you still need assistance ask your servicer what other options are available. This could including reducing your monthly payments or some other type of loan modification.
Forbearance, which this is, is not the same as forgiveness. You will still owe the amount you didn’t have to pay, plus interest, during the forbearance period.
Loan Lookup Tools
To find out whether your loan is backed by Fannie Mae or Freddie Mac, use the appropriate loan lookup tool below.
Fill in the required information to determine whether the FHFA-specific options listed here are available to you. If not, don’t despair (see below).
Other Lenders Expected to Follow Suit
Federal regulators believe most non-government-backed lenders and servicers will adopt policies similar to those adopted by the FHFA. To find out, contact your lender or loan servicer (the company you send your payment to), ask what programs they have in place to help homeowners impacted by the coronavirus outbreak and follow any instructions you are given.
Don’t Just Stop Making Payments
Whether your loan is backed by Fannie Mae, Freddie Mac, or a private lender, the one thing you should not do is to just stop making payments. You must contact your lender or servicer to let the company know you are having trouble making payments. Failure to contact your lender will result in all of the negative things mentioned above including penalties, bad credit, and ultimately, perhaps, foreclosure and eviction.
Not for Renters
These actions do not apply to you if you are renting, either an apartment or a house. Some cities have halted evictions for renters and national housing advocates have urged the federal government to enact legislation to help renters.
