© Reuters. FILE PHOTO: The Empire State Building rises above Manhattan in front of the Brooklyn and Manhattan bridges as seen from an apartment in the Central Park Tower building as the building celebrates its topping out in New York, U.S. September 17, 2019. REUTER
By Jonnelle Marte
(Reuters) – The number of U.S. homeowners exiting mortgage forbearance plans that allowed them to halt payments during the pandemic is expected to rise soon as those who signed up early on in the pandemic reach the 18-month limit for forbearance.
Here are some steps homeowners can take as they approach the end of their forbearance programs:
CONTACT YOUR MORTGAGE SERVICER
The first step for many will be to contact their mortgage servicer, which processes their payments and distributes the money to investors, tax authorities and insurers.
Servicers have simplified the processes and increased staffing levels for the surge in inquiries from borrowers reaching the end of forbearance, according to the Mortgage Bankers Association.
FIND OUT WHO GUARANTEES YOUR MORTGAGE
The payment plans available to borrowers with loans guaranteed by Fannie Mae may be somewhat different from loans backed by Freddie Mac (OTC:) or those held by private investors.
Borrowers can find out who owns their mortgage by contacting their servicer or looking it up online through tools on the websites for Fannie Mae or Freddie Mac.
CHOOSE A PAYMENT PLAN
While options can vary, borrowers exiting forbearance should be able to choose between resuming their previous payments; receiving a loan modification that reduces their monthly payments; or paying what they owe by selling their home or refinancing, options now more feasible because of the strong housing market.
The changes should require little to no documentation from homeowners, and many borrowers should be able to request that missed mortgage payments be deferred to the end of their loans, housing counselors say.
FIND A HOUSING COUNSELOR
Homeowners struggling to find an affordable payment plan or confused about where their mortgage stands can seek help from a housing counselor who can help them navigate the process.
The U.S. Department of Housing and Urban Development sponsors housing counseling agencies across the country that can help people avoid foreclosure or homelessness. Counselors can help borrowers communicate with their lenders or mortgage servicers if they are having a hard time switching to another payment plan.
Homeowners can also turn to the agencies backing their mortgage, such as Fannie Mae or Freddie Mac, for more information about available assistance.
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