Forbearance: Repayment plan with several options

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Borrowers in forbearance can defer all missed payments until the end of their loan.

Mortgage financing giants Fannie Mae and Freddie Mac announced that homeowners in forbearance can request payment deferrals and tack any missed payments on to the end of their loan term, without penalty or added interest.

Under forbearance, homeowners are still required to repay any missed payments and are allowed not to pay all at once.

Its solution is effective July 1, the date when mortgage servicers will begin to evaluate homeowners with resolved COVID-19—related hardships for eligibility.

Fannie Mae and Freddie Mac are allowing homeowners affected financially by the COVID-19 pandemic to pause their mortgage payments for up to a full year through forbearance.

Fannie Mae says that homeowners will have several options to pay back missed payments, including rolling the payments to the end of their mortgage as well as repaying in full—if they wish to—or setting up a repayment plan to gradually catch up.

Fannie and Freddie also said loan modifications could be possible depending on the borrower's situation.

To determine whether a loan is owned by one of the GSEs, visit Fannie's lookup tool or Freddie Mac's lookup tool.

Source: Fannie Mae and Freddie Mac

June 1, 2020