Covid & Housing: Mortgage Forbearance Guidelines Announced

The Federal Government announced a number of measure which may help homeowners financially affected by Covid with their mortgages.  According to Freddie Mac these measures include:

  * Providing mortgage forbearance for up to 12 months,

  * Waiving assessments of penalties and late fees,

  * Halting all foreclosure sales and evictions of borrowers living in Freddie Mac-owned homes until at least May 17, 2020,

  * Suspending reporting to credit bureaus of delinquency related to forbearance,

  * Offering loan modification options that lower payments or keep payments the same after the forbearance period.

The solutions offered by Fannie Mae were nearly identical. We not seen these guidelines from Ginne Mae, though we'd expect them to be similar when issued.

Will You Qualify For This Assistance?

The process of application and qualification for these programs are still being developed... so stay tuned.  However, the likely first threshold for most loans will be whether they are owned and/or underwritten by the major government backed mortgage systems: Fannie Mae, Freddie Mac or Ginnie Mae (FHA/VA/USDA). Broadly speaking, if your loan was not a Jumbo (over $760k) or Portfolio (a unique loan based on type of property/project and/or credit/income issues) loan issued by a smaller lender, it was likely underwritten and/or owned by one of these three institutions.

This is great news for most homeowners.

Those with Jumbo or Portfolio loans, will likely need to work directly with the owners/servicers of their mortgages for assistance. We are hopeful the national programs will filter down to these loans as well, especially if they are tied in with any assistance the banks receive.

When Will This Be Available?

We don't know quite yet. We'll be tracking this daily, and update as soon as we know.

What Should You Do Today?

Stay patient. Help will come.

In the meantime, begin to gather a file of documents to demonstrate how Covid has impacted you financially and how it impacts your ability to maintain payment for your mortgage. While we don't know the standards of qualification for this relief... they may be very low or they may be higher, we do know the programs are likely going to want documentation. This may be an email or letter from any employer documenting layoff, furlough or reduced hours, or bank statements showing reduced income in March relative to Jan/Feb '20 or even last year. Don't go overboard, just start collecting these on a file in your computer or on your desk so they are handy, and can speed your application when we know more.

** Disclaimer: The information provided here is our attempt to help everyone we can in a time of need. It's accurate to the best of our knowledge at the time of publishing, and could be out of date the moment it is published. We encourage you to check the links we've embedded in this post for the sources of information which can provide more detail.