However, a borrower may request an extension if more time is needed to recover financially. For most loans, extension may be extended up to 12 months. Other limitations may also apply. To qualify, the borrower must have requested an initial forbearance plan on or before June 30, Not all borrowers will qualify for the maximum. For mortgages backed by Fannie Mae or Freddie Mac: A borrower may request up to two additional three-month extensions, for a maximum of 18 months total forbearance.
To qualify, the borrower must have been in an active forbearance plan as of February 28, No lump-sum repayment at the end of forbearance.
Servicers for federally backed mortgages cannot require borrowers to make a lump-sum repayment at the end of the CARES Act forbearance. These notice requirements apply if all the following conditions are met: The borrower was current on mortgage payments as of Feb.
The borrower is experiencing financial hardship that prevents the borrower from making timely payments on their mortgage obligation because, directly or indirectly, of the COVID emergency. The forbearance request was made between Sept. Provide 21 days to cure any identified defects. The day clock starts on the date the written notice is mailed to the borrower. Procedural Safeguards. The Mortgage Servicing COVID Rule establishes temporary special COVID procedural safeguards that must be met for certain mortgages before the servicer can make the first notice or filing required by applicable law for any judicial or nonjudicial foreclosure process because of a delinquency.
This provision expires on Jan, 1, , meaning that the procedural safeguards are not applicable if a servicer makes the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process on or after Jan. Servicers may offer loan modification options based on an incomplete application under the Rule if the following conditions are met: Forty-year limit. No interest accrual. If the loan modification permits the borrower to delay paying certain amounts until the mortgage loan is refinanced, the mortgaged property is sold, the loan modification matures, or, for a mortgage loan insured by the Federal Housing Administration FHA , the mortgage insurance terminates, those amounts must not accrue interest.
COVIDrelated hardship. Modification ends preexisting delinquency. No fees in connection with modification and waiver of existing fees.
The rule also includes live contact requirements for borrowers: For borrowers not in forbearance. Unless the borrower states they are not interested, the servicer must also list and briefly describe to the borrower those forbearance programs made available at that time and the actions the borrower must take to be evaluated.
For borrowers in a forbearance program. Your mortgage servicer should not begin foreclosure action until the above have been performed. Include critical resources on their website Your mortgage servicer should maintain readily available information links on its website homepage to provide you with: Foreclosure-prevention options and instructions. A list of financial documents necessary when discussing foreclosure-prevention options.
Mortgage servicer contact information and HUD-certified housing counselor. Single Point of Contact When you request a loan modification or other foreclosure-prevention option, your mortgage servicer must promptly establish a single point of contact SPOC , which may be an individual or team to assist you with the process.
The SPOC should guide you through application requirements and deadlines The SPOC should provide you with the status of your application The SPOC should inform you of missing documents or information needed to complete your application The SPOC should have access to personnel with authority to stop or pause foreclosure proceedings, when necessary, during the application evaluation period. Keep you in the loop about the loan modification process, including pointing out any missing information Within five business days of your loan modification application submission, your mortgage servicer is required to acknowledge the submission; offer a description of the loan-modification process; point out any missing information or other errors; and let homeowners know of all deadlines for completing the application.
Avoid fees You should never pay any fees to apply for any options to avoid foreclosure. Your mortgage servicer should never collect any late fees while the complete loan-modification application is under consideration. Inform you of your denial rights Your mortgage servicer must inform you in writing of the reasons your loan modification application was denied and must: Give you at least 30 days to appeal the denial Allow you to submit a new loan modification application if material changes in your financial situation have occurred since the last application Inform you of other available foreclosure-prevention options.
If you believe your mortgage servicer did not comply with the Homeowner Bill of Rights, you may do the following: Seek legal assistance. Was your forbearance request denied? If you are unable to repay your missed payments all at once and can afford to pay a higher monthly mortgage payment for a period of time, you may be eligible for a repayment plan, which allows you to repay past due amounts over a period of time.
If you can afford to resume your regular monthly mortgage payment you may be eligible for a payment deferral , which puts your missed mortgage payments into a payment due at the sale or refinancing of your home, or at the end of the loan. If you have a sustained reduction in income and are unable to afford your regular monthly mortgage payment, you may be eligible for a loan modification which changes the terms of your loan to enable an affordable payment.
For Non-federally Backed Loans Check with your loan servicer for the forbearance repayment options that they offer.
When to Get Help Consult a HUD-certified housing counselor if your servicer has filed a notice of foreclosure on your home, but has failed to fulfill any of its responsibilities listed above. The sooner you make contact, the better your negotiating position. You are in the best negotiating position when you make contact before you miss a single mortgage payment. Ask to negotiate a plan to avoid foreclosure. Work with your servicer to negotiate alternative or optional mortgage loan terms that are acceptable to both parties.
Pay attention to any contact mail or telephone calls from your servicer. Remember your servicer may have an incentive to arrive at a modified or restructured mortgage loan payment. Stay proactive in your efforts. Furthermore, if your servicer tries to reach out to you for 30 days and you do not respond, the servicer may file a notice of default after the day period and start the foreclosure process.
Walk away from or abandon the home — If you abandon your home and mortgage, your servicer may begin the foreclosure process once your loan becomes delinquent. This will not necessarily end your obligations related to the loan. You can still be liable for any losses following a foreclosure sale and for any junior loans. In some instances, additional consequences may be imposed on the homeowner.
Current California foreclosure prevention programs include unemployment mortgage assistance and loan modification. Additionally, Keep Your Home California features mortgage reinstatement assistance that makes it possible to reinstate mortgages going through actual foreclosure. In addition to state foreclosure prevention programs, California homeowners can take advantage of federally sponsored versions as well. California homeowners struggling to avoid foreclosure must contact their lenders at their earliest opportunity.
Mortgage counseling in California is offered by HUD-approved counselors, as well as counselors approved by the state itself. For homeowners with mortgages owned by private lenders, accessing Keep Your Home California foreclosure prevention programs may make sense. Additionally, homeowners with private lender mortgages may find effective foreclosure prevention assistance through Hope Now, an alliance sponsored by certain private lenders.
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