The supply of existing homes for sale in the Inland Empire has fallen the most among 50 major U.S. markets tracked by Zillow.

Homeowners across the region, and the nation, have largely refused to put their homes on the market in the pandemic era, fearful of having strangers inside and the challenges of finding a new place to live. Riverside and San Bernardino’s 42.1% drop in supply for the year ending July 25 was just ahead of Baltimore, down 42%, and Hartford, off 39.6%.

Los Angeles and Orange counties had the 21st biggest drop, down 27%, according to Zillow. The national supply is down 26%.

Despite limited options for house hunters to choose from, Southern California homebuying continues to recover from a pandemic-weakened spring as pending sales increased for the 13th weekly increase in the past 14 weeks.

According to revised data from Zillow, Southern California’s four-county region put 3,716 existing residences into escrow in the week ending July 25 — up 0.9% in a week and up 6.6% over the past 12 months. It is the fourth-consecutive year-over-year jump in pending sales after 14 straight declines.

Highlights of the week for Los Angeles and Orange counties …

New pending sales: Up 2% from last week, up 2.1% in a year.

 

New listings: 0.6% fewer new homes on the market in the week. That left total inventory down 27.4% over the year.

 

Listing-to-contract: Median of 14 days, eight days faster than last year.

 

Median list price: Up 11.9% in a year to $947,760.

And in the Inland Empire …

New pending sales: Down 0.6% from last week, up 13.7% in a year.

 

Listings: 3% fewer new homes put on the market in the week. Total inventory is off 42.1% over the year.

 

Listing-to-contract: Median of 12 days, 12 days faster than last year.

 

Median list price: Up 7.2% year over year to $455,760

 

Remember, pending sales — which require various approvals, including that of a lender if a mortgage is involved — are a hint of which direction closed sales will go. The spring was the slowest-selling second quarter in a database from DQ News that dates to 1988.

Fannie Mae’s most recent Lender Letter LL-2017-09 provides more clarification on policies related to disaster relief, which includes additional details for servicers on how to evaluate borrowers for workout options after a disaster-related forbearance. In addition, the Lender Letter introduces the Fannie Mae Extend Modification for Disaster Relief, a new post-disaster forbearance modification developed jointly with Freddie Mac and the Federal Housing Finance Agency (FHFA).
The new Extend Modification for Disaster Relief results in a fixed-rate modification that extends the mortgage loan term in monthly increments to match the number of delinquent payments, not exceeding 12 months. This modification is designed for borrowers who were current or less than 31 days delinquent at the time of the disaster and meet the eligibility requirements as outlined in the Lender Letter. Servicers are encouraged to implement the Extend Modification for Disaster Relief immediately but must begin evaluating borrowers for this new modification program no later than February 1, 2018.
As part of the Lender Letter, Fannie Mae has established guidance to servicers to evaluate borrowers that are unable to become current on their mortgage loans after post-disaster forbearance relief and subsequently require a modification when the property securing the mortgage loan or the borrower’s place of employment is located in a FEMA Declared Disaster Area eligible for Individual Assistance. This guidance provides the hierarchy of modifications for which servicers must evaluate borrowers and the factors servicers should take into consideration in their evaluation. These factors include:
Was the servicer able to establish a Quality Right Party Contact (QRPC)1 with the borrower during the disaster forbearance period?
Can the borrower maintain current contractual principal, interest, taxes, and insurance?
Can the borrower manage any additional escrow repayment obligation?
Upon reviewing the required factors, the servicer will work with the borrower to determine the appropriate post-disaster-related forbearance plan modification. The below information illustrates the hierarchy of the modifications for consideration and describes the corresponding steps that are taken for each modification program that Fannie Mae makes available to those impacted by a disaster event.

Cap & Extend Modification 

• This workout option allows a homeowner to capitalize the delinquency including unpaid interest and advanced escrow payments (taxes and insurance) into the mortgage balance while extending the term (maturity date) in monthly increments to ensure the payment amount established is in line with the original mortgage payment prior the hardship.
• With this modification, the interest rate may stay the same depending on if the homeowner has an ARM or fix rate loan, and the market loan-to-value (MTMLTV). The term would be extended to achieve a payment equal to or less than the pre-modified payment. 
• A borrower response packet is not required for this workout, but the servicer must establish Quality Right Party Contract (QRPC) to confirm the payment is affordable.
• For many homeowners facing COVID-19, they have the ability to keep making the regular contractual payment once they are back to work and this option may make sense (example: their place of employment was closed for 3 months and now is back up running with no impact to their wages).

Extend Modification 

• A Fannie Mae Extend Modification allows a homeowner to extend the term of their loan (maturity date) by the number of miss payments
• Example: a homeowner with 20 years (240 payments) left on a 30-year mortgage and is 6 months past due would now have 246 payments left (240+6).
• The homeowner will need to replay any miss escrow payments (taxes & insurance) over a period of time (can be spread up to 5 years).
• The interest rate would stay the same if the homeowner has a fix rate loan and would be changed if an ARM.
• A borrower response package is not required for this workout, but the servicer must establish Quality Right Party Contact (QRPC) to confirm the payment is affordable. 

Flex Modification 

• A Fannie Mae Flex Modification allows a homeowner to capitalize the delinquency into the mortgage balance while extending the term (maturity date) to 480 months (number of payments) and the ARM loans, potentially adjusting the interest rate and potentially providing principal forbearance.
• With this modification, the interest rate would stay the same if the homeowner had a fix rate loan and would be changed if an ARM. This mod targets a 20% payment reduction. 
• With the Flex Modification, a Borrower Response Packet must be completed if the mortgage loan is less than 90 days (3 months) delinquent after forbearance. However, if 90 days (3 months) or more delinquent, a Borrower Response Packet is not required nor QRPC.
• Unlike with the first 2 modification options, this workout gives homeowners the best chance at a lowered payment, which may be important for those facing long term income impacts related to   COVID-19

For Connecticut Avenue Securities™ (CAS) transactions, the Extend Modification for Disaster Relief will not result in modification loss amounts being passed through to investors. Under our current policy, as with any other modification, a loan must be removed from the MBS trust before any permanent modification is completed. Full details on the Fannie Mae Extend Modification for Disaster Relief and additional details on policies related to disaster relief can be read here.

Freddie Mac reiterates repayment policies in the wake of COVID-19
MCLEAN, Va., April 27, 2020 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today reiterated that borrowers in forbearance living in homes owned by the company have many options to repay missed payments and are never required to choose doing so in one lump sum.
Freddie Mac CEO David Brickman made the following statement:
“Simply put, if you are a homeowner seeking forbearance and Freddie Mac owns your loan, you are never required to make up missed payments in a lump sum. Our policies offer a number of options to bring borrowers current, including repayment plans, resuming normal payments or lowering your monthly payment through a modification. We encourage homeowners facing hardship to work with their servicer to identify the plan that’s appropriate for their unique situation.”
In March, Freddie Mac announced it was taking a number of actions to assist homeowners facing financial hardship due to COVID-19. These include forbearance, during which a borrower’s payments are reduced or suspended. While borrowers in forbearance must repay the missed payments, full repayment immediately following forbearance is just one of many options, and they are never required to do so.
Owners facing a hardship are entitled to up to 12 months of forbearance. Servicers will start with a shorter plan and reassess to see if an extension for up to 12 months is necessary. Once the hardship has been resolved, there are several options for borrowers to repay the money owed, including:
Full repayment, known as reinstatement, where you pay back the missed payments and quickly get back on track.
A repayment plan, which allows borrowers to catch up gradually in addition to paying regular monthly payments.
Payment Deferral or modification of the loan, to keep monthly payments consistent and add the borrower’s missed payments to the end of the mortgage.
Modification of the loan, to reduce a borrower’s original monthly payment amount.
Loan servicers will reach out about 30 days before the initial forbearance plan is scheduled to end to determine which assistance program is best or if additional forbearance is needed. Borrowers who believe they are not being offered proper repayment options can reach out to the Consumer Financial Protection Bureau.

What is Freddie Mac doing to help ensure homeowners can remain in their homes during this critical time?

As stated, we’re taking action to assist Servicers in helping homeowners in a variety of ways, including:

§ Providing mortgage forbearance for up to 12 months,

§ Waiving assessments of penalties and late fees,

§ Suspending all foreclosure sales until May 17, 2020,

§ Offering loss mitigation options that lower payments or reinstate the mortgage to “current” status while keeping payments the same after the forbearance period.

What do we do if a customer (homeowner) becomes ill with COVID-19?

§ Any financial hardship that impacts the homeowner’s ability to make mortgage payments as a result of COVID-19, including illness to the homeowner or a dependent, is an eligible hardship that would qualify them for forbearance and/or consideration for other Freddie Mac loss mitigation offerings.

Do I still need to send interest payments for homeowners impacted by COVID-19?

Servicers must complete their normal remittance requirements, including advancing of scheduled interest payments until the loan becomes inactivated.

Are there any COVID-19-related servicing measures available to assist homeowners who may be facing hardships due to the pandemic?

As announced in the Guide Bulletin and as updated bulletin under direction of Federal Housing Finance Agency (FHFA) and in alignment with Fannie Mae, the following temporary servicing measures will be available to support you in your efforts to assist impacted homeowners:

§ Credit reporting requirements

§ Forbearance plans*

§ Loan modifications

§ Foreclosure moratorium

§ Acceptable outreach methods/requirements for establishment of quality right party contact (QRPC)

§ Bankruptcy motions for relief from automatic stay.

This includes both homeowners who have and have not contracted COVID-19, provided their ability to make timely Mortgage payments has been negatively affected as a result of a COVID-19-related hardship.

*Freddie Mac has authorized Servicers to approve forbearance plans for all homeowners who have a COVID-19-related hardship, regardless of property type, as well as temporarily waiving our 12-month delinquency cap on forbearance plans, and other requirements as described in Bulletin 2020-4 and 2020-10.

What is the effective date for these measures?

All of the temporary policies and programs we have put specifically in place in response to COVID-19 are effective immediately. Freddie Mac has been monitoring the situation, resulting in additional updates to credit reporting and forbearance plan requirements, as described in Bulletin. Going forward, we will continue to monitor the situation and may revise or revoke this temporary guidance at any time, as appropriate.

Will there be any relief for property inspections during the COVID-19 national emergency?

As communicated in Guide Bulletin, we are temporarily relieving Servicers from their responsibility to:

§ Complete property inspections related to the insurance loss settlements process

§ Complete property inspections for delinquent mortgages

§ Adhere to the property preservation requirements for abandoned properties.

Will Freddie Mac suspend foreclosures for borrowers impacted by COVID-19?

Freddie Mac is now requiring that the Servicer suspend foreclosure-related activities on properties that are not vacant or abandoned in accordance with the requirements in the CARES Act

If you’re struggling to make your mortgage payments due to COVID-19, relief options are available.

 

If you are a homeowner experiencing financial hardship directly or indirectly related to Coronavirus (COVID-19) and your mortgage is owned by Freddie Mac, contact your loan servicer (the company listed on your mortgage statement) right away to discuss your options.

Whether you’re facing job loss, reduced income, illness or other issues that impact your ability to make your monthly mortgage payment, Freddie Mac is working to ensure you are protected. In fact, the company has directed your loan servicer to provide mortgage relief options that include:

· Ensuring payment relief by providing forbearance for up to 12 months

· Waiving assessments of penalties or late fees

· Halting all foreclosure actions and evictions of borrowers living in homes owned by the company until at least May 17, 2020

· Offering loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period

Borrowers are eligible for forbearance regardless of whether their property is owner occupied, a second home or an investment property.

If you are struggling to make your mortgage payments or believe you may fall behind on your payments soon, don’t wait – contact your loan servicer now. They’re here to help you.

How does mortgage forbearance work?

To request forbearance, you’ll have to contact your lender. Lender qualifications can vary, and the type of mortgage you have can also determine what options you’re offered. If you qualify for forbearance, your lender will work with you to set up a forbearance agreement. Terms can include:

· The length of the forbearance period

· The amount of payment required during the forbearance period

· Whether the lender will report the forbearance to credit bureaus

· How you’ll repay the lender after the forbearance period ends

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

Your loan — including the skipped or lowered payments — will still accrue interest during forbearance.

When the forbearance period ends, you’ll have to pay your lender back according to previously arranged terms. There are several options for making up the missed amount. With reinstatement, you repay with a lump sum. A repayment plan spreads the payments you missed over an allotted time period by adding a set amount to your regular monthly payment. Another option is to add the repayment amount to the end of the mortgage, lengthening its term.

If your financial hardship lasts longer than you had anticipated, or you don’t have the funds for a reinstatement or repayment plan, ask your lender about a mortgage loan modification. A loan modification changes the terms of your mortgage to help make your payments more manageable.

 

How long does mortgage forbearance last?

Mortgage forbearance is intended to provide relief while you’re dealing with a short-term financial problem, so it generally does not last more than one year.

Some lenders will ask you to provide them with updates during the forbearance period. If it looks like you will need an extension or a different type of assistance, your lender can explain your options. » MORE: Ways to reduce your mortgage payment

How do I qualify for mortgage forbearance?

Qualification requirements for mortgage forbearance vary by lender, but in most cases you’ll start by submitting an application. Some lenders allow you to start with an online application; others ask that you call them first. You’ll want to have a few items on hand:

· Your most recent mortgage statement.

· An estimate of your current monthly income.

· An estimate of your current monthly expenses.

· An explanation of your hardship (and, if possible, documents that substantiate your claim).

It’s best to start the process early rather than waiting until you’re about to miss a payment. Some lenders may require you to request assistance within a certain amount of time following an event, like a natural disaster, or a change in circumstances, like filing for unemployment.

If your request for mortgage forbearance is denied, you have the option to formally appeal the decision with your lender. Your application will then be reviewed by a new loan officer (not someone involved in the initial decision), and you’ll receive an updated decision.

How to get mortgage forbearance

Contact your lender or mortgage servicer in order to apply for mortgage forbearance. The phone number on your monthly mortgage statement is a good place to start. You can also check your lender’s website for online resources.

If you want unbiased financial advice about your situation, consider talking to a housing counselor approved by the Department of Housing and Urban Development. You can find a counselor near you on the HUD website. They can weigh in on whether forbearance is the right choice for your situation and explain how different repayment plans would work

All You Need to Know About Mortgage Loan Modifications

Loan modification changes the terms of your mortgage so it’s more affordable, but it could affect your credit and the amount of interest you’ll pay.

 

If you’re struggling to make your monthly mortgage payments or have fallen behind, you may be at risk of losing your home. But depending on the circumstances, you may be eligible for a loan modification, which can make it easier to stay on top of mortgage payments and avoid foreclosure.

If you’re in this position, here’s what to know about getting a mortgage loan modification.

What is a loan modification? A loan modification is different from refinancing your mortgage. Refinancing entails replacing your loan with a new mortgage, whereas a loan modification changes the terms of your existing loan.

How does loan modification work?

Getting a mortgage loan modification could mean extending the length of your term, lowering your interest rate or changing from an adjustable-rate mortgage to a fixed-rate loan. Though the terms of your modification are up to the lender, the outcome is lower, more affordable monthly mortgage payments. Foreclosure is a costly process for lenders, so many are willing to consider loan modification as a way to avoid it.

Who qualifies for a loan modification?

Not everyone struggling to make a mortgage payment can qualify for a loan modification. In general, homeowners must either be delinquent or facing imminent default, meaning they’re not delinquent yet, but there’s a high probability they will be.

Reasons for imminent default include the loss of a job, loss of a spouse, a disability or an illness that has affected your ability to repay your mortgage on the original loan terms.

 

Types of loan modification programs

Some lenders and servicers offer their own loan modification programs, and the changes they make to your terms may be either temporary or permanent.

If your lender or servicer doesn’t have a program of its own, ask if you are eligible for any other assistance programs that can help you modify or even refinance your mortgage.

The federal government previously offered the Home Affordable Modification Program, but it expired at the end of 2016. Now, Fannie Mae and Freddie Mac have a foreclosure-prevention program, called the Flex Modification program, which went into effect Oct. 1, 2017. If your mortgage is owned or guaranteed by either Fannie or Freddie, you may be eligible for this program.

 

The federal Home Affordable Refinance Program, or HARP, helped underwater homeowners refinance into a more affordable mortgage. HARP has also expired. Fannie Mae’s High Loan-to-Value Refinance Option and Freddie Mac’s Enhanced Relief Refinance replaced HARP in 2019.

How to get a mortgage loan modification

If you are struggling to make your mortgage payments, contact your lender or servicer immediately and ask about your options. Avoiding phone calls or procrastinating will only make matters worse. The loan modification application process varies from lender to lender; some require proof of hardship, and others require a hardship letter explaining why you need the modification. If you’re denied a loan modification, you can file an appeal with your mortgage servicer. Consider working with a HUD-approved housing counselor, who can assist you for free in challenging the decision and help you understand your options.

 

Note: NHSIE is a HUD Approved Housing Counselor Agency, that can provide forbearance and or loan modification information and or assistance.

Know before you modify

One potential downside to a loan modification: It may be added to your credit report and could negatively impact your credit score. The resulting credit dip won’t be nearly as negative as a foreclosure but could affect your ability to qualify for other loans for a time.

Be aware that, depending on how your loan is modified, your mortgage term could be extended, meaning it will take longer to pay off your loan and will cost you more in interest.

But for homeowners on the brink of losing their homes, the benefits of a loan modification can far outweigh the potential credit risks and extra interest.

WASHINGTON, DC – Fannie Mae (FNMA/OTCQB) wants to help ensure families are given options in these uncertain times in the case of job loss, a reduction in work hours, illness, or other issues. We want to remind those impacted by COVID-19 of available mortgage assistance and relief options. Under Fannie Mae’s guidelines for single-family mortgages:

Homeowners who are adversely impacted by this national emergency may request mortgage assistance by contacting their mortgage servicer

Foreclosure sales and evictions of borrowers are suspended for 60 days

Homeowners impacted by this national emergency are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months

Credit bureau reporting of past due payments of borrowers in a forbearance plan as a result of hardships attributable to this national emergency is suspended

Homeowners in a forbearance plan will not incur late fees

After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification

Fannie Mae also offers help navigating the broader financial effects of this national emergency to homeowners with a Fannie Mae-owned mortgage through its Disaster Response Network*, including:

A needs assessment and personalized recovery plan

Help requesting financial relief from insurance, servicers, and other sources

Web resources and ongoing guidance from experienced disaster relief advisors 

Homeowners can find out if they have a Fannie Mae-owned mortgage and access to the Disaster Response Network™* by visiting www.KnowYourOptions.com/loanlookup.

“Our thoughts are with everyone who may be impacted by COVID-19 and we urge you to stay safe and well during these unprecedented times. Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. We encourage residents whose employment or income are impacted by COVID-19 to seek available assistance as soon as possible,” said Malloy Evans, Senior Vice President and Single-Family Chief Credit Officer, Fannie Mae.

COVID-19 Relief Options

Homeowners and renters across the country are experiencing the financial impacts of coronavirus, or COVID-19. We’re here to help. If Fannie Mae owns your mortgage loan, or if you’re a tenant in a multifamily rental property financed by Fannie Mae, our relief options can help you feel safe at home.

Mortgage Relief for Homeowners

If you are experiencing a hardship such as job loss, income reduction, or sickness due to COVID-19 and you are no longer able to make your mortgage payment, your mortgage servicer is available to help with mortgage relief options, including:

Payment relief through a forbearance plan offers a reduction or suspension of your mortgage payments for up to 12 months, offered in increments of up to six months

Late fee relief during your forbearance plan period

Repayment options following your forbearance, including a repayment plan to catch up gradually or a permanent loan modification that aims to maintain or reduce your monthly payment

Additionally, foreclosure and eviction relief may be available through the federal CARES Act signed into law on Friday, March 27, 2020.

Contact Your Mortgage Servicer: If you’re concerned about your mortgage payments, take the first step and call your mortgage servicer—that’s the company listed on your monthly statement— to request help. Have your financial information handy when you call and note that many servicers are experiencing increased call volumes and hold times due to COVID-19.

If you are a homeowner experiencing financial hardship directly or indirectly related to Coronavirus (COVID-19) and your mortgage is owned by Freddie Mac, contact your loan servicer (the company listed on your mortgage statement) right away to discuss your options.

Whether you’re facing job loss, reduced income, illness or other issues that impact your ability to make your monthly mortgage payment, Freddie Mac is working to ensure you are protected. In fact, the company has directed your loan servicer to provide mortgage relief options that include:

Ensuring payment relief by providing forbearance for up to 12 months

Waiving assessments of penalties or late fees

Halting all foreclosure sales and evictions of borrowers living in homes owned by the company until at least May 17, 2020

Suspending reporting to credit bureaus of past due payments of borrowers who are in a forbearance plan as a result of hardships attributable to this national emergency

Offering loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period

Borrowers are eligible for forbearance regardless of whether their property is owner occupied, a second home or an investment property.

If you are struggling to make your mortgage payments or believe you may fall behind on your payments soon, don’t wait – contact your loan servicer now. They’re here to help you.

The government-controlled companies that guarantee nearly half of US mortgages, could require their second bailout in just over a decade if the US economy remains in a lockdown for several months, their regulator has warned.

The two groups, which collectively underpin the $10tn US housing market, have sufficient resources to last through a lockdown of about 12 weeks, but would then need funds from Congress or the Federal Reserve, said Mark Calabria, director of the Federal Housing Finance Agency.

“If we start to go more than two or three months, then there is going to be real stress in the mortgage market, we’re talking in terms of what happened during the great recession,” he told the Financial Times. 

“If we are talking about a drawn-out period where people are not in a position to pay their mortgages, if we are talking about 25 per cent of people having to ask for forbearance, the system doesn’t have that kind of liquidity. That would require Congress to step in, or the Fed.”

Mr Calabria’s warning underlines the potential consequences for the US economy if the current coronavirus-related shutdowns persist beyond summer, as many health experts warn.

About 300,000 borrowers had asked for forbearance on loans backed by Fannie and Freddie as of April 1, Mr Calabria said. Since the agencies make up more than 40 per cent of the mortgage market, he said that implied a total of perhaps 700,000 homeowners seeking forbearance.

He said that number was likely to rise: “A lot of people got paid for half of March, so a lot of people who were able to make their payments in March won’t be able to make their May payment.”

Below are some of the more common questions with answers that are being asked daily form homeowner’s seeking answers and or guidance…

Who Qualifies for Forbearances? 

Anyone suffering financial hardship due to the COVID-19 crisis. Some servicers will take the borrower’s word / attestation, but many will request “proof” of some sort. Borrowers who are not in financial hardship should be careful about claiming they are. 

How Do I Obtain a Forbearance? 

Borrowers need to contact their servicer and apply for it. They should not simply stop making payments. Not everyone seeking a forbearance will qualify or be granted a forbearance
 

Do I Have to Pay Back Missed Payments? 

Yes, servicers will want all of the missed payments repaid as soon as the forbearance ends; some will want to restructure entire loans; and some will want to set up repayment over a period of months. Servicers will most likely try to work out the repayment system when borrowers apply for forbearances.
 

Does It Matter What Type of Mortgage I Have? 

Yes, forbearances will be easier to obtain for conforming (Fannie/Freddie), FHA and VA loans. Jumbo and non-QM borrowers, however, will have a more difficult time obtaining forbearances due to the government does not have as much influence over those entities.
 

How Will a Forbearance Affect My Credit?

 If borrowers obtain a formal approval for a forbearance, it should not affect their credit. If borrowers just stop making payments, however, without getting an approval from their servicer, it will likely impact their credit. Although credit reports will not show late payments when borrowers get their forbearances approved, future lenders will be able to see if a borrower obtained a forbearance and that could affect credit decisions in the future. 

Should I Go Through With My Purchase or Refinance If I Am Likely to Seek a Forbearance? 

No, not only will it be extremely difficult for borrowers to obtain a formal forbearance approval for a recently funded loan, missing payments on newly funded loans put the originating lender in extreme financial situation which may cause you to have serious ramifications.

As we get further into this crisis and more and more changes occur in our economy and with our government policies, these changes will benefit some homeowners but not all. 

Mortgage servicers instructed to offer deferred or reduced mortgage payments by as much as 6 months to start

WASHINGTON – The U.S. Department of Housing and Urban Development today announced a tailored set of mortgage payment relief options for single family homeowners with FHA-insured mortgages who are experiencing financial hardship as a result of the COVID-19 National Emergency. Also included is an extension period for seniors with Home Equity Conversion Mortgages.

Effective immediately for borrowers with a financial hardship that makes them unable to pay their mortgage due to the COVID-19 National Emergency, mortgage servicers must extend deferred or reduced mortgage payment options – called forbearance – for up to six months, and must provide an additional six months of forbearance if requested by the borrower. This mandate implements provisions contained in the landmark Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which President Trump signed into law on March 27, 2020.

“The last thing any of us wants is for Americans to lose their homes unnecessarily while we continue to fight this invisible enemy. If you’re struggling, immediate help is now available. The FHA will continue to work with stakeholders to ensure that the loss mitigation options that are offered for both forward and reverse borrowers are appropriately tailored for the present situation,” said HUD Secretary Ben Carson.

In addition to special COVID-19 forbearance, FHA also implemented today the COVID-19 National Emergency Partial Claim, an option to be used by servicers when the COVID-19 forbearance period ends. This partial claim will help eligible homeowners who have been granted special COVID-19 National Emergency forbearance to reinstate their loans by authorizing servicers to advance funds on behalf of homeowners. The partial claim will defer the repayment of those advances through an interest-free subordinate mortgage that the borrower does not have to pay off until their first mortgage is paid off.

Further, FHA today instructed mortgage servicers to:

Delay submitting Due and Payable requests for Home Equity Conversion Mortgages by six months, with an additional six-month delay available with HUD approval; and

Extend any flexibility they may have under the Fair Credit Reporting Act relative to negative credit reporting actions.

“For American families impacted by the COVID-19 virus and unable to pay their FHA-insured mortgage, imminently losing their homes is now one less fear they should have. Today’s actions will ease the immediate pressures faced by many Americans who, through no fault of their own, are struggling with financial uncertainty,” said Assistant Secretary for Housing and Federal Housing Commissioner Brian Montgomery

Borrowers who are not currently impacted and able to make their monthly mortgage payments should continue doing so. However, those who are experiencing financial hardship as a result of the COVID-19 National Emergency should immediately contact their mortgage servicer – the entity to which they make their monthly mortgage payments – to discuss forbearance or other options that may be available to them. Borrowers who are not experiencing an income reduction due to COVID-19 are asked to avoid contacting their mortgage servicer about these options, as these questions will divert resources from serving those truly in need.

 

If you’re among those financially impacted by the coronavirus pandemic, you might be concerned about how to pay your mortgage or rent. Federal and state governments have announced plans to help struggling homeowners during this time. Read this to get information on what to do now, and what your options are for mortgage and rental relief.

Important things to know first

For many homeowners with mortgages, there’s help, but first assess your situation.

If you can pay your mortgage, pay your mortgage.

Don’t call your mortgage servicer if you aren’t facing an immediate issue. Mortgage servicers are getting a lot of calls and need to first help those who won’t be able to pay their mortgage. Check their website first for possible options.

 

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer immediately.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

 

A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, puts in place two protections for homeowners with federally backed mortgages:

1. A foreclosure moratorium
2. A right to forbearance for homeowners who are experiencing a financial hardship due to the COVID-19 emergency

If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer or from your state.

Keep reading as we’ll first explain what the different options mean. Then we’ll explain how you can figure out if your lender or servicer can offer you any of the forms of assistance available.

 

Major mortgage relief options during the coronavirus pandemic

Mortgage forbearance

Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited period of time. Forbearance doesn’t erase what you owe – you’ll have to repay any missed or reduced payments in the future. If your income is restored, reach out to your servicer and resume making payments as soon as you can.

Depending on the kind of loan you have, there may be different forbearance options. If this option is available to you, read;

What is mortgage forbearance? 

Forbearance is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. You will have to pay the payment reduction or the paused payments back later.

Forbearance can help you deal with a hardship, such as, if your home was damaged in a flood, you had an illness or injury that increased your healthcare costs, or you lost your job. Forbearance does not erase the amount you owe on your mortgage. You will have to repay any missed or reduced payments.

How to request a forbearance

Call your servicer and let them know your situation immediately. Ask them what “forbearance” or “hardship” options may be available. 

Some servicers will require that you request forbearance or other assistance within a certain amount of time after a disaster or other qualifying event.

Mortgage forbearance options

Forbearance is complicated. There isn’t a “one size fits all” because the options depend on many factors. Those factors include: 

• The type of loan 
• The owner or investor requirements in your mortgage loan 
• Your servicer

There are key things to consider with each type of forbearance. You’ll want to pay close attention to how your servicer expects you to pay back any missed or reduced mortgage payments. 

Here are some forbearance examples to guide you

Paused Payments Option-Paid During Existing Mortgage: Your servicer allows you to stop making payments for six months, but you must pay everything back at once when your payments are due again. 

What to consider:

• You may owe a big bill that comes due all at once.  For example, if your servicer allowed you not to pay your mortgage for six months, at the end of the forbearance period, you may owe all six of your missed mortgage payments in one month.  
• Interest on the paused amounts will continue to accrue until you repay them.

Mortgage Payment Reduction Option: Your servicer allows you to reduce your $1,000 monthly mortgage payment by half for three months. After the three months are over you have one year to pay back the amount of that reduction.  

What to consider: 

• The amount of the reduction would be spread out over 12 months and added to your mortgage payment once the reduction period is over. This means your monthly mortgage will increase during that one-year period. Using the example above, you would pay $500 for three months and starting on the fourth month you would need to pay $1125.00 ($1,000 + $1500/12) each month for the next 12 months.
• Interest on any reduced amounts will continue to accrue until you repay them.

Paused Payment Option-Paid back at End of Mortgage: Your servicer allows you to pause payments for one year, and that amount is repaid by either adding it to the end of your mortgage loan or by you taking out a separate loan. 

What to consider:  

• You can extend the term of your loan for some amount of time to pay back the paused payments or take out a separate loan. 
• Extending your loan means the missed payments will be added on to the end of your loan. For example if you were given a twelve month period where you didn’t have to pay your mortgage, you’ll have twelve months of payments added on to the date when your loan was supposed to be paid off by. 
• Extending with a separate loan means when your mortgage is due you’ll also have to pay off this separate loan. This is like a balloon payment, which is one large payment due at the end of your loan.    
• Interest on the missed amounts will continue to accrue until you repay them.

 

Moratoriums suspend or stop foreclosure

Foreclosure is when the lender takes back the property after the homeowner fails to make required payments on a mortgage. Foreclosure processes differ by state.

How does foreclosure work? 

Foreclosure processes differ by state. They are generally done in two ways. If done by filing a lawsuit, it is called “judicial foreclosure.” In some states, the lender can foreclose without going to court, and that is called “non-judicial foreclosure.” State foreclosure processes require that the borrower(s) be notified regarding the foreclosure proceedings. There are also other federal rules that may apply.

Foreclosure is when the lender takes back property when the homeowner fails to make payments on a mortgage. Foreclosure processes differ by state. 

Typically, if you fall a few months behind on your mortgage payments, the foreclosure process may begin (although the process can begin earlier or later). Don’t wait for the foreclosure process to begin. Reach out for help as soon as you think you might have trouble paying your mortgage. 

The foreclosure process generally may proceed in one of these ways depending on your state: 

• Judicial foreclosure. This requires that the process go through a court where the borrower can raise defenses.
• Non-judicial foreclosure. This is done without filing a court action and is carried out by a series of steps, including required written notices under a “power of sale” clause in the mortgage or deed of trust.

Foreclosure processes require that the borrower(s) be notified regarding the proceedings and generally involve giving public notice. State laws on giving notice and scheduling a foreclosure sale vary. Some states may also provide you with the right to mediation prior to foreclosure. Be sure to read your mail and any legal notices carefully and act promptly on notices you receive.

What options do you qualify for?

Your mortgage relief options depend on who owns or backs your mortgage. Here we’ll explain how to find out what you qualify for.

First, figure out who services your mortgage. This is who you need to contact.

HOW TO REQUEST FORBEARANCE OR OTHER MORTGAGE RELIEF 

Call your servicer.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

Have your account number handy.

Your mortgage servicer is the company that you send your mortgage payments to each month.

If you don’t know or can’t remember who currently services your mortgage, there are several ways to find out, including looking at your mortgage statement for contact information.

Second, figure out if your mortgage is federally backed.

To be eligible for protections under the CARES Act your mortgage must be federally owned or otherwise backed by one of the federal agencies and entities listed below. If you don’t know who owns or backs your mortgage, you can call your servicer. The servicer has an obligation to provide you, to the best of its knowledge, the name, address, and telephone number of who owns your loan.

Nearly half of the nation’s mortgages are owned or backed by Fannie Mae or Freddie Mac.

To look up online whether your mortgage is owned or backed by Fannie or Freddie, click these links:

• Is my loan backed by Fannie Mae ?
• Is my loan backed by Freddie Mac ?

CARES Act Relief Options

VIDEO: CARES ACT MORTGAGE FORBEARANCE — WHAT YOU NEED TO KNOW 

If you can’t make your mortgage payments because of the coronavirus, start by understanding your options and reaching out for help.

If your mortgage is a federally backed mortgage, you have two mortgage relief options under the CARES Act:

• First, your lender or loan servicer may not foreclose on you for 60 days after March 18, 2020. Specifically, the CARES Act prohibits lenders and servicers from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale, during this period of time.
• Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request a forbearance for up to 180 days. You also have the right to request one extension for another up to 180 days. You must contact your loan servicer to request this forbearance. There will be no additional fees, penalties or additional interest (beyond scheduled amounts) added to your account. You do not need to submit additional documentation to qualify other than your claim to have a pandemic-related financial hardship.

If your mortgage is backed by Fannie Mae or Freddie Mac

In addition to the foreclosure moratorium and forbearance, if you are granted forbearance to delay making your monthly payments during this temporary period:

• You won’t incur late fees
• You won’t have delinquencies reported to credit reporting companies
• Foreclosure and other legal proceedings will be suspended

Borrowers with a mortgage not backed by the federal government

If you have a mortgage loan that is not backed by one of the federal agencies or entities listed above, contact your servicer. The CFPB and other financial regulators have encouraged financial institutions to work with borrowers who are or may be unable to meet their obligations because of the effects of COVID-19.

Your servicer should help you identify alternatives that may be available to you given your specific circumstances.

Your state may also offer additional mortgage relief options

Many states are implementing or considering various mortgage relief options, including the suspension of foreclosures, as well as additional assistance for homeowners. Check your state’s government website for details.

How to request forbearance or mortgage relief

Call your servicer

You may have to wait on the line for a while to speak to your mortgage servicer because there are a lot of people in need right now. Be prepared with the following information and questions you want to ask and check their website before you call to see if there is a list provided of information you may need. Have your account number handy.

You may need to explain

• Why you’re unable to make your payment
• Whether the problem is temporary or permanent
• Details about your income, expenses and other assets, like cash in the bank
• Whether you’re a servicemember with permanent change of station (PCS) orders

Questions to ask

• What options are available to help you temporarily reduce or suspend my payments?
• Are there forbearance, loan modification, or other options?
• Can you waive late fees?

Get it in writing

Once you’re able to secure forbearance or another mortgage relief option, ask your servicer to provide written documentation that confirms the details of your agreement and that you’re clear on what the terms are. With some forbearance programs, you may owe all of your missed payments at one time, or additional payments at the end of the mortgage might be required, so make sure you’re familiar with the final terms.

What to do once you’ve received a mortgage relief option

While you’re in the forbearance period, or working under another mortgage relief option, there are a number of things to do to continue to protect yourself. This advice applies to both a CARES Act forbearance and other mortgage relief that you might receive.

• Keep written documentation on hand. You want to make sure that you have this documentation available in case there are any errors on your monthly mortgage statements to ensure that your statement reflects the assistance provided.
• Pay attention to your monthly mortgage statement. Continue monitoring your monthly mortgage statements to make sure you don’t see any errors.
• Keep an eye on your credit. It’s a good idea to routinely check your credit reports in order to make sure there are no errors or inaccuracies. If you stop making mortgage payments without a forbearance agreement, the servicer will report this information to the credit reporting companies, and it can have a lasting negative impact on your credit history. If an error has been made, however, you can work to dispute it. Get more information about credit reporting and coronavirus.
• Once your income is restored, contact your servicer and resume your payments. With forbearance, you still owe the payments that you missed, but fewer missed payments mean you’ll owe less down the road.
• If you’re continuing to receive some income that turns out to be more than you need for your bills and expenses (including anything you keep paying on your mortgage), consider putting the extra money away so you can use it to pay off what’s needed later. If you can save any money now, it’ll be helpful when payments are due later.

Be aware of scams

Scammers often take advantage of vulnerable consumers during disasters and financial shocks. In addition to coronavirus-related scams, be aware of scams that falsely promise financial relief from your mortgage loan, or from foreclosure.

Here’s what to watch for as scammers may:

• Charge a high up-front fee for their services
• Promise to get you a loan modification
• Ask you to sign over your property title
• Ask you to sign papers you don’t understand
• Tell you to make payments to someone other than your servicer
• Tell you to stop making payments altogether
• Promise you payments in connection with providing credit card numbers and other personal information

Protections for renters

If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. If your landlord has a federally backed mortgage or multi-family mortgage, you cannot be evicted for nonpayment of rent for 120 days beginning on March 27, 2020, the effective date of the CARES Act. After the 120-day period is up, the landlord cannot require you, the tenant, to vacate until providing you with a thirty-day notice to vacate.

If the property you rent isn’t covered by the CARES Act, many states have suspended all evictions and foreclosures due to the pandemic. Check the websites of your state government, state court , or legal aid program for details and updates.

Where to get additional help

If you need help working with your servicer or understanding your options you may want to reach out to a professional to help you with your specific situation.

• HUD-Approved Housing Counselors. The U.S. Department of Housing and Urban Development (HUD)-approved housing counselors can discuss options with you if you’re having trouble paying your mortgage loan or reverse mortgage loan. This may also include forbearance or a modified payment program.
• Credit Counselors. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.

If you are a homeowner with an FHA-insured single-family home mortgage and you’re having difficulty making your monthly mortgage payments due to the COVID-19 National Emergency, help is available. The three most important things you should do to protect your home investment if you have, or expect to have, a loss of income due to COVID-19:

1. Continue to make your monthly mortgage payments, if you are able to do so.

2. If you are unable to make your mortgage payment, contact your mortgage servicer — the entity to which you make your monthly mortgage payments —as soon as possible and discuss your situation with a loss mitigation specialist. Please understand that your servicers ability to respond quickly may be impacted during this National Emergency.

 

Trying to Understand Your Options? These Frequently Asked Questions Can Help

Q. I lost my job or have been furloughed due to the COVID-19 National Emergency and am worried that I cannot make my next mortgage payment. What should I do?

A. FHA has communicated to mortgage servicers that they must offer you special COVID-19 mortgage payment relief options if you are eligible.

If you are able to keep making your mortgage payments during the national emergency, it is in your best interest to do so. If you find you are no longer able to make your monthly mortgage payments, the first thing you should do is contact your servicer — the company to whom you make your monthly mortgage payments. Your servicer will be able to provide you with what is known as forbearance, a mortgage repayment option that allows you to defer or lower your monthly payments for up to six months, and an additional six month period, if needed. Your mortgage servicer can further explain the details of the FHA COVID-19 National Emergency Forbearance option — what it means now and the options for bringing your mortgage payments current in the future.

Q. I am having trouble making my mortgage payment due to the impacts of the COVID-19 National Emergency. Do I need to provide my servicer with documentation to prove I need forbearance?

A. FHA servicers will ask you to confirm that you are having a financial hardship, either directly or indirectly, due to the COVID-19 National Emergency in order to qualify for a COVID-19 Forbearance, but will not require that you supply any documents.

Your mortgage servicer can further explain the COVID-19 Forbearance and can help you figure out other options for repaying any suspended mortgage payments or the balance of reduced mortgage payments.

Q. Will the monthly mortgage payments that are reduced or suspended under a COVID-19 Forbearance need to be repaid?

A. Yes. A homeowner with an FHA-insured mortgage who receives a COVID-19 National Emergency Forbearance is responsible for repaying the suspended mortgage payments or the balance of reduced mortgage payments.

Your mortgage servicer can help you determine your options for eventually repaying any suspended mortgage payments or the balance due as a result of reduced mortgage payments. Your servicer will not charge you late fees and penalties while you are on a COVID-19 National Emergency Forbearance plan.

Q. I’m worried about making my mortgage payment in the future with all the economic uncertainty around the COVID-19 pandemic. How can I proactively address this issue?

A. Millions of U.S. homeowners are being impacted by the COVID-19 National Emergency. FHA has mortgage relief options, including the COVID-19 Forbearance, that homeowners with FHA-insured mortgages can use to defer or reduce your monthly mortgage payment, if needed. FHA continues to encourage those who can make their mortgage payments during this time to do so.

You should contact your mortgage servicer as soon as possible if you are unable to make your mortgage payments because of financial hardships from the COVID-19 National Emergency. If requested, your servicer will provide you with what is known as a forbearance, which will allow you to defer or lower your monthly payments for up to 12 months. Your mortgage servicer can further explain the details as well as options for repaying those amounts due in the future.

Q. If I go back to work after starting an FHA COVID-19 Forbearance and can make my regular mortgage payments again in less than six months, should I resume paying them?

A. Yes. Even if you received an FHA COVID-19 Forbearance, you are not required to use the full six months. It is more beneficial for you to begin making your regular mortgage payments as soon as you can reasonably do so.

If you are able to begin making your payments prior to the expiration of your forbearance, contact your mortgage servicer and let them know you are ready to resume making your regular monthly mortgage payment. Your servicer will assist you in doing so.

 

 

Q. How do I contact my servicer to let them know I want a Forbearance?

A. Maximum mortgage repayment flexibilities are being offered to homeowners with FHA-insured mortgages due to the COVID-19 pandemic. However, you must contact your servicer as soon as you think you might not be able to make your regularly scheduled mortgage payment to request an FHA COVID-19 National Emergency Forbearance.

This repayment option will allow you to defer or lower your monthly mortgage payments for up to 12 months. You can use any available means of communication to contact your servicer to request a forbearance. This includes, but is not limited to, phone calls, emails, texts, fax, mail, teleconferencing, etc.

Q. I have a Home Equity Conversion Mortgage (HECM) but have to go to a nursing home/rehabilitation facility due to COVID-19. Can I delay making the HECM due and payable so my spouse/partner/family can remain in the home?

A. Yes. To ensure that your spouse/partner/family can remain in your home, you must contact your HECM servicer, the company who manages your HECM, as soon as possible.

Upon your request, they must delay submitting a request to call your HECM due and payable.

Q: I have a Home Equity Conversion Mortgage (HECM) but can’t pay my property taxes right now. Will I lose my home?

A. No. You must contact your HECM servicer, the company who manages your HECM, as soon as possible.

Upon your request, they must delay submitting a request to call your HECM due and payable.

Q: I am having difficulty reaching my mortgage servicer. What should I do?

A. Mortgage lenders and servicers are currently working with reduced staff and capacity due to the COVID-19 pandemic. As a result, FHA suggests homeowners check with their servicer for the best way to contact them should you need to. Homeowners are encouraged to check their mortgage servicers website for contact options and updated information. Keep in mind your mortgage servicers ability to respond quickly may be impacted by COVID-19 National Emergency.

It is important to remember that only your mortgage servicer can help you with forbearance if you are affected financially by COVID-19 and cannot make your monthly mortgage payments.