COVID-19 Forbearance plans extended for Federal-backed mortgages

If you have a federal backed mortgage and you are on the COVID-19 forbearance plan, you may be eligible for an additional three-month extension.

According to the Federal Housing Finance Agency (FHFA), borrowers with mortgages backed by either Fannie Mae or Freddie Mac, who were on a forbearance plan as of the end of February, are eligible for an additional forbearance extension of up to three months, providing up to 15 months of coverage. This is up from the initial 12-month expiration date.

This move comes on the heels of the FHFA extending multifamily forbearance policies in December 2020 and extending options for multifamily mortgages backed by Government Sponsored Enterprises (GSE’s) through the end of March.

Additionally, moratoriums that were supposed to expire at the end of February on single-family foreclosures and real estate owned (REO) evictions were also extended to the end of March.

FHFA’s Director Mark Calabria told Housing Wire that the company’s recent actions are to “help keep families in their home during the pandemic.”

It is estimated that 2.7 million American homeowners are in forbearance and the forbearance portfolio volume has been steady between 5% and 6% for more than four months, according to a survey conducted by the Mortgage Bankers Association.

The FHFA projected that the COVID-19 moratorium on foreclosures and REO evictions could cost Fannie Mae and Freddie Mac upwards of $2 billion. The Federal Housing Administration plans to monitor the impact of the pandemic on the market and has already reported that if risk factors on certain policies become untenable that they will sunset those policies.