What Your Loan Servicer Must Do If You Request Forbearance
If you’re having trouble making payments on your federally backed mortgage because of the COVID-19 pandemic, contact your loan servicer before September 30, 2021. Your loan servicer must:
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Defer or reduce your payments for 180 days if you contact them to make arrangements
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Give you another 180 days of mortgage relief at your request
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Offer options for how you can make up the deferred or reduced payments. They will discuss these options with you at the end of your forbearance period.
Find Your Loan Servicer
If you don’t know whether your mortgage is federally backed, see a list of federal agencies that provide or insure mortgages. You can also check the Fannie Mae loan lookup and the Freddie Mac loan lookup to see if either one owns or backs your mortgage. Together, Fannie Mae and Freddie Mac own nearly half of all mortgages in the U.S.
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These options augment additional COVID protections HUD published last month. These included the foreclosure moratorium extension, forbearance enrollment extension, and the COVID-19 Advance Loan Modification: a product that is directly mailed to eligible borrowers who can achieve a 25% reduction to the P& I of their monthly mortgage payment through a 30-year loan modification. HUD believes that the additional payment reduction will help more borrowers retain their homes, prevent future re-defaults, help more low-income and underserved borrowers build wealth through homeownership, and assist in the broader COVID-19 recovery.
Additional AssistanceIn addition to these new opportunities for borrowers, agencies across the federal government are also taking other steps to support borrowers as our economic and public health recovery continues.
Giving Borrowers the Information They Need to Understand their OptionsThese new loan modification and payment reduction options will only give borrowers the relief they need if borrowers have the information to understand their options.
Borrowers should contact their servicer or housing counselor as soon as possible to learn more about the options available.
For borrowers not currently in forbearance, there is still an opportunity to access relief.
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General Description Of The Measure
This measure will temporarily introduce increased reliefs for expenditure on plant and machinery. For qualifying expenditures incurred from 1 April 2021 up to and including 31 March 2023, companies can claim in the period of investment:
- a super-deduction providing allowances of 130% on most new plant and machinery investments that ordinarily qualify for 18% main rate writing down allowances
- a first year allowance of 50% on most new plant and machinery investments that ordinarily qualify for 6% special rate writing down allowances
The measure also temporarily amends the rules covering expenditure incurred on plant and machinery used partly in a ring fence trade in the oil and gas sector.
Mortgage Refinance Relief In 2021
The HARP program was live between April 2009 and the end of 2018. It helped more than 3.5 million borrowers successfully refinance their Fannie or Freddie mortgages.
In recent years, the Fannie Mae High LTV Refinance Option and the Freddie Mac Enhanced Relief Refinance program were introduced to offer similar refinance relief to HARP.
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How To Find Out If Your Loan Is Federally Backed
To find out whether your loan is backed by the federal government, making you eligible for the help noted above, here are some actions you can take:
- Check online. Use loan lookup tools provided by Fannie Mae or Freddie Mac to find out if either of those two government-backed providers owns your mortgage.
- Check the Mortgage Electronic Registration Systems website to find your servicer if you don’t know who that is.
Lien Strip In Chapter 13 Bankruptcy
If you have multiple mortgages on your home and owe more on your home than it is worth, you might be able to âstripâ the junior mortgage through Chapter 13 bankruptcy.
For example, if your house is worth $250,000 and you have three mortgages against the home for $150,000, $100,000 and $50,000 you could request that the court convert mortgage C to unsecured debt. This unsecured debt would then be discharged through bankruptcy and you would only remain obligated to pay mortgages A and B.
There are lots of factors to consider when pursuing bankruptcy. Learn more about the bankruptcy process on Upsolveâs free Learning Center site.
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Va Streamline Refinance Eligibility: Lower Your Interest Rate And Monthly Payments
To qualify for a VA Streamline Refinance, you must meet the VAs minimum service requirements. Most veterans, including National Guard and Reservists and their families, can qualify.
You can typically qualify for a VA Streamline Refinance without any credit score, income or asset verification, or without a property appraisal. That means you can refinance quickly and affordably.
In addition to those minimum service requirements, you may be eligible if you meet the following criteria:
- You have made all your payments on time in the last 6 months
- Its been 210 days or more since you closed on your existing loan
- You will benefit demonstrably from the new mortgage, such as by a lower mortgage rate or monthly payment
Fmerr Lets You Refinancewith A High Loan
Under the Freddie MacEnhanced Relief Refinance, you can refinance your home loan atcurrent interest rates if you have little to no equity. So if youdont qualify for standard mortgage refinance programs, lower rates are still an option for you.
With the FMERR option, youcan refinance even if the property is underwater,meaning the value of the home is lower than the outstanding debt.
Thats right. If your home isworth $300,000 and you owe $310,000, you can still refinance with FMERR if youmeet other guidelines.
Most conventional loanprograms are notoriously conservative about loan-to-value ratios . ButFreddie Mac eliminates LTV maximums for this loan type.
For instance, say yourhome is worth $100,000 and you owe $120,000. You could get a new mortgage thatcovers the full amount owed even though it would have a 120%loan-to-value.
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If I Am A Landlord Is Financial Assistance Available
If you’re a landlord struggling to pay your mortgage because your tenants have been impacted by COVID-19 and are having difficulty paying their rent, the Consumer Financial Protection Bureau has helpful information on state and local programs offering rental assistance. Eligibility varies, but landlords can often apply directly, and may be able to receive direct payments. Each rental assistance program has conditions, and landlords and tenants should contact the program in their area to find out how to get started. Or if you would like personalized help from a HUD-approved housing counselor, call our Disaster Response Network directly at . These counselors can help you navigate the rental assistance application process for your tenants.
Enhanced Help To Buy Scheme
The maximum relief available was temporarily increased on 23 July 2020. Thisincrease has been extended in subsequent budgets and the increased relief nowapplies to the 31 December 2022.
If you sign a contract for a new house or draw down on a self-build mortgagebetween 23 July 2020 and 31 December 2022,you are eligible for the increased relief called enhanced relief.
You can claim relief on the lesser of:
- 30,000
- 10% of the purchase price of the property
- 10% of the completion value of a self-build
- The amount of income tax and DIRT you paid for the previous 4 years
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Emergency Rental Assistance Program
The Emergency Rental Assistance program provides funding to help renters who are unable to pay rent or utilities. The funds are provided directly to states, U.S. territories, local governments, Indian tribes, Tribally Designated Housing Entities, and the Department of Hawaiian Home Lands. These entities may use ERA funds to provide assistance through existing or newly created rental assistance programs.
What Is A Harp Loan
Real estate values plummeted during the 2008 financial crisis, leaving many homeowners with little or no equity. These borrowers were stuck owing more on their mortgage than their home was worth. The HARP mortgage program gave underwater homeowners the chance to refinance to lower rates, keep more of their money every month, and build equity once again.
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Nearly 2 Million Americans Still Arent Paying Their Mortgages
As of July 20, 1.86 million borrowers remained in COVID-19 forbearance plans, according to mortgage data firm Black Knight. That number totals 3.5 percent of all active mortgages and fully 6.2 percent of FHA and VA loans. Meanwhile, the official unemployment rate stood at 5.9 percent in June.
Many homeowners will need deeper assistance due to pandemic-related income loss, Biden said in a statement. For example, due to the economic crisis caused by the pandemic, some homeowners are earning less than they were before the pandemic.
Hiro Eligibility: Qualify For Mortgage Relief And A Lower Interest Rate
The HIRO qualifications are relatively simple, but they are important. You may be eligible for HIRO if:
- Your current mortgage loan is owned by Fannie Mae*
- Your loan must have been originated after October 1, 2017
- At least 15 months have passed from the note date of the existing loan to the note date of the new home loan
- You have made all your payments on time in the last 6 months
- Your mortgage balance is 97.1% or higher as a percentage of your homes market value, for a one-unit, owner-occupied dwelling
*You may not even know that your mortgage is owned by Fannie Mae. If youre unsure, use this lookup tool on the Fannie Mae website.
If you meet these conditions you are very likely to have access to lower rates but you need to act now before rates go up. Speak with your mortgage lender about relief options.
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How To Request Homeowner Assistance Funds
Homeowner Assistance Funds are in the process of being distributed to states for redistribution to homeowners. Treasury has provided guidance for states to use in developing their individual HAF plans.
You will request funds from your state once your state’s HAF plan has been approved and the system is up and running. Meanwhile, the National Council of State Housing Agencies’ Homeowner Assistance Fund webpage features a map showing the status of each state’s HAF to date.
What Is A Forbearance Plan
If you own your home and are experiencing financial hardship as a result of COVID-19, you may be able to receive a forbearance plan.
Entering into a forbearance plan can give you some financial breathing room. A forbearance plan doesnt erase the amount you owe on a mortgage, but it temporarily suspends or reduces your mortgage payment until your hardship is over. At the end of the forbearance plan, you must repay what you missed, but necessarily not all at once.
Talk with your servicer about your situation, so they can help you and give you the best mortgage relief option for your situation.
If you were current on your loan before you started a forbearance plan or another accommodation covered by the CARES Act, you will be reported as current to the credit bureau as long as you continue to make payments as required by the plan youre set up in, or as long as no payments are required under the plan.
Fannie Mae can help you learn more about what to expect on a forbearance plan and when youre ready to move forward, you can start here.
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Loans Refinanced Under New Enhanced Relief Refinance Program To Be Retained In Crt Pools
Publishes HARP Historical Dataset to Increase Transparency for Investors
MCLEAN, VA– – Freddie Mac today announced that loans referenced in credit risk transfer pools that are subsequently refinanced under the new Enhanced Relief Refinance program will be retained in the original structures to preserve credit loss protection, beginning with Structured Agency Credit Risk and Agency Credit Insurance Structure transactions that reference loans originated on or after October 1, 2017. The ERR program pdf is a new refinance offering that will replace the Home Affordable Refinance Program upon its termination in December 2018 – HARP loans are currently excluded from CRT reference pools.
“By helping underwater borrowers to refinance, the ERR program is intended to reduce credit losses and by retaining those loans in our original reference pools we preserve credit loss protection on them,” said Michael Reynolds, vice president of credit risk transfer.
To help investors analyze and model for ERR in CRT reference pools, Freddie Mac has published historical HARP loan level data disclosures as a proxy. The HARP dataset will augment the existing Freddie Mac Single-Family Loan Level Dataset, which provides loan-level performance data on approximately 23.5 million fixed-rate, single-family mortgages originated between January 1, 1999, and June 30, 2016.
The HARP dataset can be accessed at .
How Do I Know If I Qualify
Every homeowner can check eligibility for free. Keep in mind that homeowners with a 600+ credit score and a mortgage balance under $719,000 are more likely to qualify for a larger cash out payment.
Checking your eligibility is fast and simple. Just complete this simple survey here to see how much money you qualify to receive.
Deadlines for this program have not been announced, however homeowners are encouraged to check their eligibility as soon as possible!
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Real Estate Prices Have Generally Been Rising But Not For Everyone
According to ATTOM Data Solutions more than 5 million U.S. properties 8.8% were seriously underwater in the fourth quarter of 2018. These are properties where mortgage balances are at least 25% higher than market values. For example, under the seriously underwater standard, a home that might sell for $300,000 has at least $400,000 in outstanding mortgage debt.
The FMERR program is open to homes that are seriously underwater and also those that are slightly upside down or only have a little bit of earned equity. Consider a property with a $300,000 fair market value and $298,000 in mortgage debt it has equity, but not enough to refinance under most mortgage programs.
California Mortgage Relief Program
While the COVID-19 pandemic has affected millions of Americans and created turmoil for homeowners, California is on track to receive $1 billion in mortgage relief funds from the American Rescue Plan Actâs Homeowner Assistance Fund. Homeowners who have fallen behind on their mortgage payments due to pandemic-related financial hardship can use these funds to get caught up.The California Mortgage Relief Program will be provided to homeowners through CalHFA Homeowner Relief Corporation as part of the stateâs Housing is Key initiative.
Program Status
California has submitted its Mortgage Relief Program plan to the U.S. Treasury for review and approval.
The state expects to open an online application for the full program shortly after funding has been received from the U.S. Treasury.
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What Is A Mortgage Relief Refinance
When most people think of government or Congress mortgage relief, theyre thinking of HARP the Home Affordable Refinance Program.
HARP was a government program rolled out by the Federal Housing Finance Agency in 2009. For nine years, it helped millions of homeowners refinance after being hardhit by the housing crisis.
The HARP program ended in 2018.
But many homeowners were still underwater on their mortgages especially in areas where home values have fallen instead of rising in recent years.
So Fannie Mae and Freddie Mac created similar relief programs, called HIRO and FMERR, to help homeowners refinance with little or no home equity.
The federal government also offers mortgage relief via the FHA, VA, and USDA Streamline Refinance programs. These lowdoc refinance loans dont require a home appraisal, so homeowners can refinance even if they have very little home equity or if their home values have fallen.
Freddie Mac Enhanced Relief Refinance
Similar to the Fannie Mae high loan-to-value refinance option, the Freddie Mac Enhanced Relief Refinance program benefits homeowners who have little equity in their home but want to refinance to more competitive rates. This program is geared toward homeowners who currently have a mortgage through Freddie Mac, are current on their payments, and arent eligible for a traditional refinance because their LTV ratios are too high.
With Freddie Mac Enhanced Relief Refinance, your minimum LTV ratio on a one-unit home would have to be 97.01%. Minimum LTV ratios will differ depending on how many units are in the home and whether its a primary or secondary home, or an investment property.
With this program, you arent required to pay for new mortgage insurance, and any existing mortgage insurance would transfer. You also dont need to provide as much documentation around income, employment, and assets as you would if you were moving forward with a conventional refinance.
You can use this Freddie Mac program to refinance your mortgage as many times as you want, whereas with HARP, you were limited to only one time. Unfortunately, though, if you were a beneficiary of HARP, you arent able to refinance again through the Freddie Mac Enhanced Relief Refinance.
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Fmerr Eligibility: Qualify For Mortgage Relief And A Lower Interest Rate
You may be eligible for FMERR if:
- Your current mortgage is owned by Freddie Mac*
- Your loan was originated on or after November 1, 2018
- Your LTV is at least 97.01% for a one-unit, owner-occupied resident
- You have made all your payments on time in the last 6 months
- Your mortgage balance is 97.1% or higher as a percentage of your homes market value, for a one-unit, owner-occupied dwelling
*You may not even know that your mortgage is owned by Freddie Mac. If youre unsure, use this lookup tool on the Freddie Mac website.
If you meet these conditions you are very likely to have access to lower rates but you need to act now before rates go up. Speak with your mortgage lender about relief options.
