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For the millions of Americans who have taken advantage of options to put a pause on their monthly mortgage payments during the coronavirus pandemic, the government is offering a couple of repayment solutions once homeowners regain their financial footing.
The Federal Housing Finance Agency (FHFA) said in a press release Wednesday Fannie Mae and Freddie Mac will allow borrowers who are able to resume making their monthly mortgage payments the option of repaying their missed payments either at the time the house is sold, refinanced or at maturity. That way, the amount due in monthly payments remains unchanged.
"This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers,” FHFA Director Mark Calabria said in a statement. “Borrowers who can pay their mortgage should, because missed payments remain an obligation that will ultimately have to be repaid.”
The payment deferral options will be available beginning July 1.
Borrowers who have taken advantage of the FHFA’s forbearance option – implemented as part of the CARES Act – will not be required to repay their missed payments in a lump sum.
As previously reported by FOX Business, the total number of loans in forbearance as of May 3 increased to 7.9 percent, according to data from the Mortgage Bankers Association, which was up from 7.54 percent the previous week. Nearly 4 million Americans have entered into forbearance agreements.
Even as some state economies begin to reopen, recent labor market data indicates more trouble could be on the way for borrowers. Since mid-March, 33 million Americans have filed jobless claims, while the unemployment rate skyrocketed to 14.7 percent in April, as the U.S. shed an unprecedented 20.5 million jobs.