How to Get Relief With a Federally Secured Mortgage
To help homeowners facing an expiring mortgage grace period, the Department of Housing and Urban Development (HUD) announced another extension of the eviction moratorium and grace period availability for FHA , USDA and VA home loans until June 30, 2021. if deferred prior to that date, may be eligible for an extension of six months.
This follows the announcement of the Federal Housing Finance Agency on the fact that borrowers with mortgages secured by Fannie Mae and Freddie Mac, are also eligible for a three-month extension of the deferred payment, for a total of 15 months of coverage. In addition, for these mortgages, the moratorium on single family foreclosures and real estate owned (REO) evictions was not extended by one month, until March 31. (Here’s a breakdown of the difference between all these types of loans if you need a refresher).
If you show leniency, you will still be on the hook for repayments, but your monthly loan payments are suspended, although interest is still charged in accordance with the terms of the loan. However, you will not be considered late payments or otherwise damage your credit score. The qualifications are simple – you just need to ask the lender to abstain from paying your mortgage.
However, not all lenders comply with the rules, and some are reported to mislead borrowers about their rights, impose unauthorized fines and illegally evict tenants . To avoid this, read this Lifehacker post about your rights as a borrower and how you can file a complaint against a dishonest lender.
If you need help with mortgage services or an understanding of your options, HUD can put you in touch with the nearest HUD approved housing counselor on its home counseling web page.
Approximately 12% of all mortgages are secured by the FHA. These loans have traditionally been used by low- and middle-income borrowers – usually first-time homeowners – who have below average credit ratings or may not be able to afford large down payments. Unfortunately, the number of FHA borrowers who delayed mortgage payments reached 15.7% earlier this year, while the default rate on conventional loans was only 6.7% at the interest rate .
This story was originally published on December 22, 2020 and updated on February 22, 2021 with new information.