Homeowners with a resolved hardship related to COVID-19 (including those who are exiting a forbearance plan) have options to bring their loan current. Servicers should discuss options with homeowners and determine eligibility. Options after a forbearance plan include the following listed below.
Reinstatement
The homeowner pays back any missed amounts at once if financially able to do so. After the reinstatement, the homeowner continues to pay their mortgage under the original terms of their mortgage loan.
Guidance: Fannie Mae’s Workout Hierarchy
Repayment Plan
Homeowner resumes making their regular monthly payments, plus an additional portion of the missed amount each month until the missed amount is paid off.
Guidance: Repayment Plan
COVID-19 Payment Deferral
Homeowner resumes making regular monthly payments. This workout solution defers the missed amount along with any servicing advances paid to third parties (e.g., taxes and/or insurance premiums) to the maturity date as a non-interest bearing balance. The deferred amount is due on the maturity date (or earlier whenever the home is sold, or the loan is refinanced or otherwise paid off).
Guidance: COVID-19 Payment Deferral
Fannie Mae Flex Modification
A homeowner has experienced a permanent impact to their ability to pay their regular monthly mortgage payment. After the homeowner completes a trial period plan, all unpaid amounts are added to the unpaid principal balance, and monthly mortgage payments are permanently modified to what may be a lower amount through a rate reduction and a term extension to 40 years (480 payments) from the effective date of the modification.
Guidance: Fannie Mae Flex Modification
Your lender has a lawyer, you should too. We feel that anyone seeking loss mitigation should have an Attorney/Realtor® (without cost). That’s why we formed Lawyers Realty Group.
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