User:Kmnapoli9/sandbox

If you are facing financial hardships, you need to get in contact with your mortgage servicing company. The servicing standards require some due diligence on behalf of the lender including contact with you and some assessment of your current situation. In these conversations explore the various work out options available at the end of the forbearance period. Also request for validation and documentation of verbal conversations via email and written agreements as applicable.

Some exceptions to this is where a reduced rate was given (where the possible intention here to reduce the capital balance as quickly as possible, thereby reducing the loan to value) or where the type of forbearance is for the lifetime of the loan, i.e. a split loan where 1 part of the loan is parked until the expiry date, with the intention that at that time a suitable repayment vehicle (say, sale of asset) is in place for the repayment of the loan in full.

The GSE's released payment policies in April of 2020 that clarified the terms of the COVID-19 forbearance plans. The announcement clarified that while full payment of arrears was an option to reinstate consumers are never required to choose a lump sum option. It reiterated the four options of full repayment, a repayment plan over time, a deferral to move the payments to the end of the loan, or a modification of the loan for more permanent hardships. The guidance specified owners facing hardships would start with shorter duration plans but those could be extended up to 12 months if necessary after reassessing the consumers financial hardship. The GSE's are also waiving late fees and suspending foreclosure sales and evictions until May, 17,2020.

Forbearance, in the context of a mortgage process, is a special agreement between the lender and the borrower to delay a foreclosure. The literal meaning of forbearance is “holding back.”

When mortgage borrowers are unable to meet their repayment terms, lenders may opt to foreclose. To avoid foreclosure, the lender and the borrower can make an agreement called "forbearance." According to this agreement, the lender delays its right to exercise foreclosure if the borrower can catch up to its payment schedule by a certain time. This period and the payment plan depend on the details of the agreement that is accepted by both parties.

Historically, forbearance has been granted for customers in temporary or short-term financial difficulty. If the borrower has more serious problems, e. g. the return to full mortgage payments in the long term does not appear sustainable, then forbearance is usually not a solution. Each lender is likely to have its own suite of forbearance products. In response to COVID-19 government sponsored mortgage loans in the United States qualify for forbearance plans in compliance with the CARES Act. These plans are for borrowers impacted by COVID-19. Some common questions that arise include what are the consumers options at the end of the forbearance period and how will a forbearance agreement impact my credit. At the end of the forbearance period the consumer will be required to participate in a work out plan and the options include bringing the mortgage payments current, paying the loan in full, a mortgage modification plan, deferral of payments until the end of the loan or increased monthly payments to cure the arrearage. While it is difficult to predict your personal financial situation after the immediate crisis, it is important to note that a forbearance is not forgiveness and interest continues to accrue and if a final work out arrangement is not adopted foreclosure later down the line can be pursued by the lender. In addition it is important to note that these agreements do not block credit bureau reporting and the Government Sponsored Agencies ("GSE's) have provide guidance that the lender must report the mortgage status which will reflect the delinquency and past due payments.

The information on WIKI related to mortgage forbearances is currently very limited and it is an extremely contemporary issue and I am sure many folks are trying to learn more about these programs. I plan to add contemporary information updated to reflect the COVID - 19 details.

“Impact of COVID – 19 on Servicing” Fannie Mae Lender Letter 18 Mar. 2020 https://singlefamily.fanniemae.com/media/22261/display

"Mortgage Servicing In The Time Of COVID-19." Mondaq

Business Briefing, 3 Apr. 2020, p. NA. Gale General OneFile, https://link-gale-com.ezp.mesacc.edu/apps/doc/A619356876/ITOF?u=mcc_mesa&sid=ITOF&xid=f9f3c96b.

Accessed 20 Apr. 2020.