As the coronavirus began sweeping through the country in March, many states issued shut-down orders for businesses, putting as many as 40 million people out of work by May. On March 27, Congress passed the CARES Act to offer economic relief to those affected by the shut-downs, expanding unemployment benefits and offering mortgage forbearance to homeowners with mortgages backed or insured by the federal government, including Freddie Mac, Fannie Mae, VA and FHA.
Under the CARES Act, homeowners can ask for forbearance from their mortgage servicer and suspend payments for up to 12 months. Approximately 4.3 million homeowners have requested forbearance since the program began, although, over the last several months, the number of people with mortgage loans in forbearance has continued to drop, decreasing to 3.4 million in the last week of September, according to the Mortgage Bankers Association.
Now, servicers are doing the hard work of helping borrowers as they exit forbearance with payment deferral/partial claim plans, lump-sum payments and other modifications.
“The share of loans in forbearance continues to decline and is now at a level not seen since mid-April,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Many homeowners with GSE loans are exiting forbearance into a deferral plan and resuming their original mortgage payment, but waiting to pay the forborne amount until the end of the loan.”
We have partnered with Freddie Mac to bring you this FAQ page to answer those questions and provide updates to the program.
Our goal is to provide a resource that is continuously updated with the latest news and information so that lenders, servicers and homeowners can work together during this period of crisis and recovery.