Some homeowners will soon come to the end of their 18-month mortgage forbearance period, and borrowers affected by the pandemic will have to figure out how to repay their lenders for back payments. Fortunately, most loan servicers don't want to foreclose, and they offer several repayment options than can help keep borrowers in their homes.
If the Federal Home Loan Mortgage Corp. (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae) owns your mortgage — and they do for about 80 percent of all mortgages — it may have temporarily suspended your payments for up to 18 months. Congress specified no deadline for applying for coronavirus-related forbearance from either of the two mortgage giants, although their regulator, the Federal Housing Finance Agency, has set a Sept. 30, 2021, deadline. If your loan is insured by the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development; the Department of Agriculture; or the Department of Veterans Affairs (VA), the deadline for requesting an initial forbearance is also Sept. 30.
Your first step should always be to contact your loan servicer. You can check online to see if Freddie Mac or Fannie Mae owns your mortgage:
Remember, it's not loan forgiveness; it's loan forbearance. You and the servicer agree to temporarily reduce or suspend mortgage payments, and the servicer agrees not to foreclose during that time. You will still owe principal and interest on the payments you missed.
If your loan isn't owned or serviced by the federal government, ask your servicer about forbearance offers. In any event, if you're having difficulty making payments because of the pandemic, contact your servicer as soon as possible.
About 1.6 million mortgages are in pandemic-related forbearance, Black Knight, a mortgage data and technology company, told USA Today. Although that's down from pandemic highs, it's still a large number of troubled mortgages. Those who had to go into forbearance last year will soon have to start weighing their options.