A forbearance is when a mortgage provider or lender allows you to pause or reduce your mortgage payments for a limited time while restoring your finances. For most loans, there are no additional fees, penalties, or additional interest (beyond the scheduled amounts) in your account, and you don’t need to submit additional documents for sorting. You can simply tell your service provider that you are having financial difficulties related to a pandemic. Patience does not mean that payments are forgiven or cancelled. You will continue to be required to repay any arrears, which in most cases can be repaid over time or when your home is refinanced or sold. Before the grace period expires, your service will contact you about refunding outstanding payments.
Who is eligible for forbearance?
You may have a right to a COVID hardship forbearance if:
For mortgages that are not federally backed, servicers may offer similar forbearance options. If you are struggling to make your mortgage payments, servicers are generally required to discuss payment relief options with you, whether or not your loan is federally backed.
When is the deadline for applying?
If your loan is backed by HUD/FHA, USDA, or VA, you may request an initial COVID hardship forbearance as long as the COVID-19 National Emergency is in place. If your loan is backed by Fannie Mae or Freddie Mac, there is not currently a deadline for requesting an initial forbearance.
How long does forbearance last?
Your initial forbearance plan will typically last 3 to 6 months. If you need more time to recover financially, you can request an extension. For most loans, your forbearance can be extended up to 12 months. Some loans may be eligible for up to 18 months of forbearance, depending on when your initial forbearance started. Other limitations may apply.
If your mortgage is backed by Fannie Mae or Freddie Mac : You may request up to two additional three-month extensions, for a maximum of 18 months of total forbearance. But to be eligible, you must have been in an active forbearance plan as February 28, 2021.
If your mortgage is backed by HUD/FHA , USDA , or VA : You may request up to two additional three-month extensions, for a maximum of 18 months of total forbearance. But to qualify, you must have requested an initial forbearance plan on or before June 30, 2020. Not all borrowers will qualify for the maximum.
If you are facing financial difficulties, you are not alone. Help is available. Most owners qualify for tolerance for coronavirus-related financial hardship. Tolerance is when your mortgage agent or lender allows you to pause or reduce your mortgage payments for a limited period of time while you get your balance back. Forbearance is not automatic. You must register with your mortgage agent. This may seem like a big step to take, but taking action now can help you pause payments and avoid foreclosure. Forbearance ends with a payment plan, not a lump-sum payment
Homeowners who receive COVID hardship forbearance are not required to repay their paused payments in a lump sum once the forbearance period ends. You can talk with your mortgage servicer, or start with a HUD-approved housing counseling agency, to discuss a repayment plan that works for your situation.
Most servicers must offer forbearance, and the others can provide options
The COVID hardship forbearance applies to all federally backed and federally sponsored mortgages, which includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac mortgage loans. This includes most mortgages. Homeowners with federally backed loans have the right to ask for and receive a forbearance period for up to 180 days—which means you can pause or reduce your mortgage payments for up to six months. Additionally, you can request an extension of forbearance for up to 180 additional days, for a total of 360 days.
UPDATE: Since this video was released, federal agencies have provided more options to extend forbearance.
If your mortgage is backed by Fannie Mae or Freddie Mac : You may request up to two additional three-month extensions, up to a maximum of 18 months of total forbearance. But to qualify, you must have received your initial forbearance on or before February 28, 2021. Check with your servicer about the options available.
If your mortgage is backed by HUD/FHA , USDA , or VA : You may request up to two additional three-month extensions, for up to a maximum of 18 months of total forbearance. But to qualify, you must have received your initial forbearance on or before June 30, 2020. Check with your servicer about the options available.
Other mortgages may also provide similar forbearance options. If you are struggling with payments, servicers are generally required to discuss relief options with you, whether or not your loan is federally backed. It may be easier to contact your service provider than you think
In the early days of the pandemic, homeowners announced that it was difficult to contact a telephone service provider. Many mortgage lenders have now improved their ability to respond to customers. However, it is recommended that you wait patiently. You can contact your service provider by phone or online. Some service providers may have a website for you to understand your options and ask you to be patient.
Mortgage lenders usually cannot request evidence of difficulty
You can ask for patience and tell your service provider that you are having financial difficulties due to the epidemic. If you have a loan backed by the federal government, the lender may not ask for difficulties.
You do not need to pay for help with forbearance options
HUD-approved housing consultants and their advisors provide free services to borrowers who need patience. You should avoid scams – especially help with prepaid expenses – whether for your mortgage or other services, such as unemployment benefits or loan repairs.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.