FHFA Announces New Forbearance Repayment Options – NMP Skip to main content

FHFA Announces New Forbearance Repayment Options

May 13, 2020
Photo credit: Getty Images/krblokhin

The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac are making available a new payment deferral option. It allows borrowers who are in forbearance due to COVID-19 and can return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced or at maturity.
Servicers will begin offering the payment deferral repayment option as of July 1, 2020.
“For homeowners in forbearance due to COVID-19, payment deferral allows them to make up missed forbearance payments when they sell their home or refinance,” said FHFA Director Mark Calabria. “This new forbearance repayment solution responsibly simplifies options for homeowners, while providing an additional tool for mortgage servicers. Borrowers who can pay their mortgage should because missed payments remain an obligation that will ultimately have to be repaid.”
FHFA and the GSEs do not require lump sum repayment at the end of the forbearance. Servicers are required to evaluate borrowers for one of several repayment options, generally referred to as a “hierarchy" of repayment and loan modification options.
Payment deferral is one of the repayment options. It takes the missed mortgage payments and puts them into a payment due at the sale, or refinancing of the home, or the end of the loan. The borrower's monthly mortgage payment will not change. Mortgages that exercise the payment deferral option will remain in Enterprise Mortgage-Backed Securities, subject to the terms of the trust agreements.
“A primary benefit of this option is that a homeowner’s mortgage payment will not change once the forbearance period ends,” said Mortgage Bankers Association President and CEO Robert D. Broeksmit. “MBA has advocated strongly for additional options to assist homeowners, and we appreciate FHFA taking the industry’s feedback in making payment deferrals available. We appreciate the efficiency this process will bring as it benefits borrowers, mortgage servicers, investors and the GSEs.”

May 13, 2020
Homeward Lays Off 20% Of Staff

Alternative real estate financing company cut about 120 jobs.

Industry News
Aug 12, 2022
Lone Peak Lending Joins Panorama Mortgage Group

Names Donovan Stamps as president.

Industry News
Aug 11, 2022
Fairway Independent Mortgage Hires Former PrimeLending President

Firm says Scott Bristol is part of aggressive originator expansion.

Aug 11, 2022
Mortgage Rates Jump Back Above 5%

Freddie Mac says rates recent volatility continues.

Industry News
Aug 11, 2022
Redfin: Share Of Relocating Buyers At All-Time High In July

People are looking for less expensive and better lifestyles.

Industry News
Aug 11, 2022
Redfin Expands iBuying Business To Florida

RedfinNow, which makes cash offers for homes, now operates in 34 markets in 16 states and the District of Columbia.

Aug 11, 2022