What is the foreclosure moratorium?
The foreclosure moratorium halts all foreclosures and evictions on homes with loans backed by Fannie Mae and Freddie Mac.
States across the country have also taken steps to offer mortgage payment assistance, and homeowners and investors should know of their available options.
What are lenders doing during the moratorium?
Click here to access a page with a partial list of publicly announced steps that banks have taken. Bookmark this page so you can stay up to date as aba.com updates it periodically. Here are a few examples of what some lenders are doing and what they are offering borrowers:
– Offering forbearance of payments for up to 90 days for mortgages and consumer loans.
– Giving payment deferrals for up to 90 days on mortgage loans and suspending foreclosures on homes for 60 days.
BMO Harris Bank
– Currently offering customers a 90-day payment forbearance with no late fees for mortgage and home equity loans.
– Also, instituting a suspension on starting any new foreclosures for the next 60 days.
– Payment extensions are provided with no late fees for credit cards, consumer mortgage payment forbearance and payment deferment for 90 days.
– Providing a four-month forbearance program to mortgage loan customers.
These are just a few examples of what to expect when researching how lenders are currently working to help their customers.
What are government entities doing?
To lessen COVID-19’s impact on borrowers, the FHA (Federal Housing Administration) has put together several strategies to assist those in need. The most notable, being the Foreclosure Moratorium, which allows FHA permitted borrowers to pause or reduce their monthly mortgage payments for up to six months. Borrowers can also ask for an additional six months if needed and aren’t required to make a lump sum repayment after the forbearance.
Relief for Fannie Mae borrowers
Fannie Mae is currently offering the following types of relief to borrowers:
• A forbearance plan that offers a reduction or suspension of mortgage payments for up to 12 months. This plan is offered in up to 6-month increments.
• Late fee relief throughout the forbearance period.
• As the forbearance period ends, borrowers can re-pay their past due amounts at once, but aren’t required to. You’re also permitted to set-up a repayment plan to catch up gradually, a payment deferral to move the past due amount to the end of your loan term or a loan modification to potentially reduce your monthly payment.
To read more regarding COVID-19 relief options for Fannie Mae borrowers, click here.
Relief for Freddie Mac borrowers
Freddie Mac is also offering relief to borrowers in the methods detailed below:
• Providing payment relief through 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 August 31, 2020. Borrowers are also eligible for forbearance regardless of whether their property is owner-occupied, a second home or an investment property.
• Offering loan modification options to provide mortgage payment relief or keep those payments the same after the forbearance period.
• As of July 1, 2020, offering a payment deferral solution in which deferred payments will be due at the end of the loan.
To learn more about Freddie Mac’s relief efforts, click here.
Other information regarding relief efforts
Aside from the points above, clicking this link will direct you to CFPB’s page detailing their relief options for federally or GSE-backed mortgages. The National Association of Realtors also put together a list of resources for property owners and investors, this can be accessed here.
If you are looking to invest in real estate during this period, we recommend gathering as much information as possible in order to make an informed decision.
Millions of Americans are currently in forbearance. Every day they stay in forbearance could eat away the equity they’ve earned in their home putting them a potentially even worse position after the government mandated protections end. If you find yourself in this situation and have equity in your home then Hubzu’s Signature Seller Auctions could be a option. Through its Signature Seller Auctions, Hubzu helps individuals market their properties to over 1.9 million registered users and thousands of investors. Click here to learn more about how you could avoid being foreclosed on and further damage to your credit.