Federal Reserve Chairman Jerome Powell says the Fed does not have the ability to change mortgage or credit card payments.
The government gave Americans mortgage payment relief options during the coronavirus pandemic by allowing some borrowers to pause their mortgage payments, but what payment options do homeowners have after the grace period ends?
The tolerance provisions, included as part of the CARES Act, apply to federally backed mortgage loans, such as those backed by Fannie Mae and Freddie Mac.
ANSWERS TO CORONAVIRUS MORTGAGE WAIVER FROM INDUSTRY EXPERTS
As of July 5, about 4.1 million loans were in tolerance, according to the Mortgage Bankers Association. The percentage of patience loans backed by Fannie Mae and Freddie Mac was approximately 6%, while those backed by Ginnie Mae was approximately 10.56%.
Relief provisions allow individuals to request tolerance for 180 days with the option to extend the break for an additional 180 days.
CORONAVIRUS MORTGAGE RELIEF OPTIONS TO BE TAKEN INTO ACCOUNT IF MONEY IS TIGHT
People who took advantage of the leniency option will be required to pay those amounts and generally have several ways to do so depending on their loan.
In general, people with GSE-backed loans will not have to make lump sum payments.
As the Office of Consumer Financial Protection noted, if you can afford to increase your monthly payment a little each month, you can choose to pay off the balance over time.
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You can also defer your payments until you sell or refinance the home, or until the end of the loan.
If your financial circumstances changed during the pandemic, you may be able to modify the terms of your loan to create an affordable payment schedule.
You should contact your administrator about your options and which one is right for you.
For more information on repaying other types of loans, you can visit the CFPB website.
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