In response to recent concerns raised about the repayment terms for mortgages backed by Fannie Mae or Freddie Mac that are in now forbearance due to the coronavirus pandemic, FHFA Director Mark Calabria confirmed today that borrowers will not be required to repay their missed payments in a lump sum at the end of the forbearance period.
Fannie and Freddie also issued their own statements detailing relief options for borrowers to make up their missed payments once their financial hardship has been resolved. These options include setting up a repayment plan, modifying the loan so that missed payments are added to the end of the mortgage, or modifying the loan to reduce the borrower’s monthly payment. The GSEs noted that they would reach out to borrowers about 30 days before the scheduled end date of the forbearance period to discuss these options and determine if additional forbearance is needed.
Calabria noted that while this only applies to loans backed by Fannie or Freddie, “I encourage all mortgage lenders to adopt a similar approach.” FHFA also recently announced a partnership with the CFPB, the Borrower Protection Program, to ensure that homeowners receive accurate information about forbearance options.