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Do I qualify for mortgage forbearance during the COVID-19 Pandemic?

On May 14, FHA announced an extension of its foreclosure and eviction moratorium through June 30, 2020, for homeowners with FHA-insured Single Family mortgages.

This applies to homeowners with FHA insured mortgages, and directs mortgage servicers to halt all foreclosure and eviction actions currently in process (excluding legally vacant or abandoned properties).

If homeowners with FHA insured mortgages cannot make their mortgage payments during the foreclosure and eviction moratorium may seek mortgage payment forbearance via the CARES Act from their loan servicer to avoid future foreclosure actions when the moratorium expires.

Pursuant to the CARES Act, FHA requires mortgage servicers to:

Offer borrowers with FHA-insured mortgages UP TO 6 MONTHS OR MORE of delayed mortgage payment forbearance when the borrower requests it.

Assess borrowers who receive COVID forbearance for its special COVID National Emergency Standalone Partial Claim before the end of the forbearance period.

The COVID National Emergency Standalone Partial Claim puts all deferred mortgage payment amounts owed into a junior lien which is only repaid when the borrower sells the home, refinances the mortgage, or the mortgage is otherwise extinguished.

NOTE: FHA does NOT require a lump sum payment at the end of the forbearance period. Initially, some lenders were trying to make the missed payments due in a lump sum at the end of the 3,4, 6-month forbearance period. They have since been advised/warned not to do this as this is not what the CARES Act called for. If you contact your lender, about a forbearance, make sure to ask about this!

How do I know if I have an FHA loan/mortgage?

Check your monthly statement. It breaks down how much of your monthly payment goes to principal, interest, and if there is an amount labeled “MIP” that is the monthly FHA insurance that is paid on all FHA loans. You can also check your closing statement for a mortgage insurance fee.

Mortgage Insurance Premium (MIP), like PMI, is an additional fee you pay to protect the lender's financial interests in case you default on your loan. FHA borrowers are required to pay two FHA mortgage insurance premiums — upfront at closing, and annually for as long as you repay your FHA loan, in most cases.

Here’s a good link for more info.

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