Here are some answers to your frequently asked questions about the Special Forbearance Plan. Please register here.
What is a COVID-19 Special Forbearance Plan? In the forbearance plan, a lender agrees to reduce or suspend mortgage payments for a period of time. Forbearance agreements provide short-term relief for borrowers who experience temporary financial difficulties because of unforeseen problems such as temporary unemployment or health problems. During this forbearance, negative credit reporting is suspended, no late fees will be assessed, and foreclosures will not be initiated. In exchange, you must resume making your monthly payment at the end of the forbearance period.
How are you helping customers experiencing a hardship due to COVID-19? The special forbearance plan offers immediate relief through an initial 90-day mortgage payment pause with the option to extend for another 90 days. If you’re still unable to make your mortgage payment after 180 days, you can request an additional extension of up to 180 days. You can continue to pay a portion or all of your monthly mortgage payments to help reduce the amount owed at the end of the plan period.
How do I know if I qualify for a forbearance plan? The CARES Act provides for a forbearance for borrowers who have federally backed mortgage loans and who have experienced a financial hardship related to the COVID-19 emergency. A hardship can be because of illness, unemployment, a reduction in work hours for the borrower/co-borrower or a dependent of the borrower/co-borrower.
Who qualifies for forbearance? You qualify for the Pandemic Forbearance Plan if you have a federally backed home loan (Fannie Mae, Freddie Mac, FHA, VA, USDA) and COVID-19 has affected your ability to make your mortgage payment. Your property must be one of the following:
- A single-family residence,
- A one- to four-family residence,
- An individual unit of a condominium or cooperative.
I want to know my repayment plan before I register for the forbearance plan? We cannot determine your repayment plan until your forbearance period is over and we know exactly how many payment you’ve missed. While everyone’s situation is unique, repayment options generally include:
- A loan deferral that will add your missed payments to the end of your loan.
- A repayment plan, in which you pay a little extra every month on your regular mortgage payment to gradually catch up on your missed payments.
- A loan modification that aims to maintain or reduce your monthly payment. Please understand that not all loans qualify for a modification. Please consult with one of our loan counselors to see if your loan qualifies.
I heard that some lenders are just forgiving missed payments during this time, is that true? Some announcements in the news may lead you to believe your mortgage company can offer payment forgiveness. With forbearance, you can delay payments for up to 365 days. However, missed payments are not forgiven and once your forbearance period is over, you are expected to resume your normal monthly mortgage payments and work with us to catch up on the payments you’ve missed.
Can’t I just defer the missed payments to the end of the loan instead of a being on a forbearance plan? You must be on the forbearance plan initially to take advantage of a loan deferral option. In most cases, we can offer a payment deferral program which adds your missed payments to the end of your loan. There are certain restrictions, but our loan counselors will work with you to determine the best options for your needs.
Can’t my loan just be modified now instead of being put on a forbearance plan? A modification is a long-term solution. A forbearance will give you time to evaluate how long your circumstances surrounding the COVID-19 pandemic will last.
What if I am still impacted by COVID-19 after a 90-day forbearance? Simply call us to let us know that you are still affected and we will extend your forbearance period for another 90 days up to a maximum of 365 days.
Will I be charged late fees or interest for pausing my payments during the forbearance? No. During your forbearance, all late fees will be waived and no additional interest will be charged.
Will the forbearance plan impact my credit? If your loan was current when you enrolled, any payments that are paused during your forbearance period won’t be reported late to the credit agencies. If you were behind on your mortgage payments when you enrolled, your past-due status will remain. However, payments paused during your forbearance period will not be reported as late to the credit bureaus.
I am on Auto Pay for my monthly payments. Will I need to turn it off during the forbearance plan? We will automatically move your Auto Pay for you if you choose to participate in a forbearance plan.
I have automatic payments set up through my bank’s online bill pay. Should I cancel them? Yes. If you use online bill pay through your bank, please be sure to cancel or suspend payments while on a forbearance plan.
If I am able, can I make a partial payment while I am on a forbearance plan? Yes. This means you will have less to make up after the forbearance plan ends. These partial payments will sit in what’s called a “suspense account” until the amount equals a full monthly payment. It will then be applied as a normal full payment.
Can I cancel the forbearance plan later if I decide I don’t want it? Yes. You can cancel your forbearance plan any time. Just remember that when the forbearance plan ends, you will need to work with our counselors to make up the payments you missed while on the plan. Or, you may need to seek a loan modification that aims to maintain or reduce your monthly payment.
I’m on a forbearance plan. Why am I receiving documents/letters that indicate I’m delinquent? Since you are not making payments during a forbearance, your loan is technically delinquent. We are legally required to send you certain notices about your delinquent status. Don’t worry though, you are not being charged late fees and we are not reporting your delinquency to credit agencies during the forbearance period, and we are not taking the next steps in any foreclosure proceeding while the forbearance plan is in place.
What happens after the 90-day forbearance period is over? After the 90-day payment suspension is over, you need to reach out to us to help us understand your circumstances in order to determine the best way to help you move forward. Your options include extending the forbearance period. If you’re able to make your current monthly payment, you’ll need to work with our loan counselors to determine the best way to catch up on the payments you missed.
I was delinquent on my mortgage before COVID-19. Can I still qualify for the forbearance plan? Yes. The forbearance plan is available to all affected homeowners, including those who were delinquent before the pandemic. Your delinquency may, however, affect the options that may be available to you at the end of your forbearance plan.
I am on an active trial modification or other workout plan. Will the forbearance plan affect it? Yes. If you opt for the forbearance plan, any other plan you’re on will be canceled. You may reapply at the end of your forbearance for a new trial plan.
Are bankruptcy accounts eligible? If you or a co-borrower on the loan is currently a debtor in an active bankruptcy case, we may need to obtain Bankruptcy Court approval of your forbearance plan.
Can my house be foreclosed on or can I be evicted? No. Until Dec. 31, 2020, there is a nationwide moratorium on all foreclosure and eviction proceedings, regardless of whether you opt for the forbearance plan. If you opt for the forbearance plan, we will not proceed with foreclosure initiations or foreclosure sales during the forbearance period.