Fannie, Freddie introduce COVID-specific payment deferral
New bulletins from Fannie Mae and Freddie Mac have detailed a new option for the repayment of mortgages forborne because of the pandemic, announcing a payment deferral program specific to borrowers impacted by COVID-19.
Under the new plan, borrowers whose forbearance plans are directly coronavirus-related have an option to defer their missed payments until the end of their loans. Borrowers will be able to defer up to 12 months of mortgage payments in this fashion until their loan matures, they refinance or they sell the property covered by the loan. Opting for the “COVID-19 Payment Deferral,” as the new program is called, will bring the homeowner current on their mortgage.
Meanwhile, the borrower’s missed principal and interest payments (along with any other allowable costs advanced by their servicers during the forbearance period) will be moved into a non-interest-bearing balance that comes due if one of the aforementioned conditions is met. As with forbearance plans in general, borrowers will not be required to repay that balance all at once; the mortgage servicer must work with the homeowner to determine how they will repay missed payments.
Servicers will begin offering the payment deferrals beginning July 1.