Federal Housing Finance Agency (FHFA) clarified in their statement today that homeowners affected by the coronavirus pandemic who choose to reduce or pause their monthly payments on federally-backed mortgages will not be required to repay the missed payments in one lump sum.
“During this national health emergency, no one should be worried about losing their home,” said Mark Calabria, director of the FHFA, in a statement. “No lump sum is required at the end of a borrower’s forbearance plan for Enterprise-backed mortgages.”
Prior to this announcement there were a number of homeowners’ complaints stating that their servicer only made an offer of three months of forbearance, followed by the homeowners having to make a lump sum repayment.
What lenders have often left out of their communications with customers is that if they continue to experience coronavirus-related hardship, they can extend the forbearance period for up to a whole year, but in three- or six-month increments. At the end of each forbearance term, lenders must work with customers to either continue payment suspension or establish a repayment plan.