New Payment Option for Borrowers Announced

It is, in fact, “great news”!!!

Both FHFA (Federal Housing Finance Agency) and GSE (Fannie Mae and Freddie Mac) announced they will allow borrowers to defer missed mortgage payment till when they sell their homes, refinance or to the end of the loan term.

FHA Borrowers Offered New Option for Catching Up on Loans

Up until today, the borrowers could defer the payment but technically they had to pay off lump sum of all the missed payment at the end of the forbearance period, which for most borrowers who had to request forbearance due to the financial hardship is impossible. Good news for borrowers for sure!!

Now my worry is, what about the servicers?

The reason that repayment had to be made at the end of forbearance period is because loan servicers are not compensated. If this new remedy of CARES act does not include any compensation to the servicers, many smaller ones without they own funds will be in serious trouble. From the article, it is not clear if there is such remedy for servicers or not.

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