The Federal Housing Finance Agency (FHFA) has directed government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to offer mortgage assistance to borrowers impacted by the coronavirus national emergency.
That includes suspending foreclosures and evictions for at least 60 days and offering forbearance plans to reduce or suspend mortgage payments for up to 12 months.
In addition, past due payments or forbearance plans as a result of hardships attributable to the virus will not be reported to the credit bureaus.
Also, homeowners in forbearance plans will not incur late fees and, following forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification.
The measures are codified in the recently-enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic relief package which was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27.
“Our thoughts are with everyone who may be impacted by COVID-19 and we urge you to stay safe and well during these unprecedented times,” says Malloy Evans, senior vice president and single-family chief credit officer for Fannie Mae, in a statement. “Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. We encourage residents whose employment or income are impacted by COVID-19 to seek available assistance as soon as possible.”
“We are doing all we can to help those adversely impacted by the coronavirus, including by immediately suspending foreclosure sales and evictions during this challenging time,” says Donna Corley, executive vice president and head of the single-family business at Freddie Mac, in a separate statement. “These eviction and foreclosure stoppages are just one part of the comprehensive assistance we’re providing borrowers to help protect our communities. We are also expanding relief available through our well-known forbearance programs, allowing us to reach the majority of affected borrowers as expeditiously as possible.”
Borrowers who experience financial challenges due to COVID-19 are strongly encouraged to contact their mortgage servicer – the company they send their monthly mortgage payments to – so they can explore workout options, Freddie Mac says.
“We are committed to helping families affected by the virus and we are instructing servicers to work with borrowers who are unable to make their mortgage payments to ensure they are evaluated for a forbearance plan or other appropriate assistance,” says Kevin Palmer, senior vice president of single-family portfolio management at Freddie Mac. “We ask that servicers be responsive to potential requests for assistance from borrowers who may be impacted by COVID-19.”
“This foreclosure and eviction suspension allows homeowners with [a GSE]-backed mortgage to stay in their homes during this national emergency,” says Mark Calabria, director of the FHFA, in a statement. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible. The [GSEs] are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.”