There is a lot of uncertainty as the number of COVID-19 cases rise in the United States. Schools have closed for the rest of the school year in Virginia and many businesses have had to close or scale back temporarily, meaning that some people have found themselves unemployed. In light of this crisis, Freddie Mac, Fannie Mae, and the Department of Housing and Urban Development (HUD) are suspending all foreclosures and evictions until May 17th, 2020. Similarly, the Supreme Court of Virginia has ruled to suspend all evictions for tenants who are unable to pay their rent now until April 6th. As events continue to unfold, these dates could be extended.
Freddie Mac and Fannie Mae both have forbearance plans for homeowners who are impacted by the COVID-19 outbreak. The forbearance plan reduces or suspends mortgage payments for 12 months. Borrowers in a forbearance plan will not incur late charges during that time. Additionally, the forbearance plan will suspend reporting to the credit bureau for past due payments. Keep in mind that a loan forbearance plan is best used for situations of temporary hardship since the interest continues to accrue even during the forbearance period.
Any homeowners who need mortgage assistance are strongly urged to reach out to their mortgage servicer at this time. It's important to note that some lenders may expect a lump-sum payment at the end of the 12 months while others may offer a repayment plan. Loan modifications may also be available.
The vast majority of borrowers have loans under Fannie Mae, Freddie Mac, or HUD. To see if your mortgage is owned by Freddie Mac, click here. To see if your mortgage is owned by Fannie Mae, click here.
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