October 21, 2020

Coronavirus and the CARES Act: We Are Here to Help Frequently Asked Questions

Mortgage Relief Options Q: What options are available to me, since I have been impacted by the coronavirus pandemic (COVID-19)? The Coronavirus Aid, Relief, and Economic Security (CARES) Act offers certain protections for homeowners whose mortgages are backed by the federal government. It’s not always easy to understand whether your mortgage loan is backed by the federal government or another organization. In other words, who owns your mortgage loan? You can find out easily. Both Fannie Mae and Freddie Mac offer a mortgage lookup tool on their website. To get a better sense of your options, carefully read this FAQ. You’ll also find valuable tools at the Consumer Financial Protection Bureau (CFPB). Watch the video there for good information about mortgage assistance options. You will also find information there to help you if your mortgage loan is not federally backed. The CARES Act offers certain protections for any homeowner with a federally backed mortgage. These include:

1. A right to forbearance due to financial hardship The CARES Act allows you, as the borrower, to request a forbearance on your federally backed mortgage regardless of your delinquency status.* During forbearance, monthly payments (principal, interest, and escrow) are suspended for an initial period of up to 180 days. Forbearance does not mean your payments are forgiven. You are still required to fully repay your suspended payments, but not all at once. If you are still financially impacted by the coronavirus, your initial forbearance period may be extended for up to another 180 days for a total of 360 days. You may shorten either forbearance period at any time. Note: If you pay your own property taxes, insurance, or HOA/condo fees separately from your mortgage, you must continue making these payments during forbearance.

If your forbearance period or financial hardship has ended, there are other options that may be available to you based on your financial situation and the details of your mortgage. We’ll work with you to evaluate the options available to you. See below for more information. *The CARES Act only applies to federally backed mortgages. The vast majority of borrowers in owner-occupied homes have federally backed loans. If you do not have a federally backed mortgage, other mortgage assistance options may be open to you, but different eligibility requirements may apply. If you do not have a federally backed mortgage, other mortgage assistance options may be available to you, but different eligibility requirements may apply.

2. A hold on foreclosures

If you’re worried about foreclosure during the forbearance period, don’t be. Collection activity, including foreclosure, will not occur while your loan is in the forbearance plan. There are, however, scammers who often try to take advantage of consumers when they are most vulnerable. To learn more about scammers and how to avoid being taken advantage of, please visit the Consumer Financial Protection Bureau’s website.

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Forbearance Plan Q: Do I need to apply for a forbearance plan? No application is necessary. All you need to do is state that you are having a pandemic-related financial hardship. No additional documentation is required and there will be no additional fees, penalties, or interest (beyond scheduled amounts) added to your account during the forbearance period. After your initial 180 days, you may request an extension for up to another 180 days for a total of 360 days. You may shorten either forbearance period at any time. Note: If you pay your own property taxes, insurance, or HOA/condo fees separately from your mortgage, you must continue making these payments during forbearance. Q: How do I know if my mortgage loan is or is not backed by the federal government? It’s not always easy to understand whether your mortgage loan is backed by the federal government or another organization. If you don’t know who owns or backs your mortgage, you can call us for the name, address, and telephone number of the institution that owns your loan. Your mortgage documents and note may also tell you, especially if you have a VA or FHA loan. Another way to find out: Both Fannie Mae and Freddie Mac offer a mortgage lookup tool on their website. Loans insured or guaranteed by FHA, VA, or the USDA are also federally-backed loans. Q: What is a forbearance plan? During forbearance, monthly payments (principal, interest, and escrow) are suspended for an initial period of up to 180 days. Forbearance does not mean your payments are forgiven. You are still required to fully repay your suspended payments, but not all at once unless you are able to. If you are still financially impacted by the coronavirus, your initial forbearance period may be extended for up to another 180 days. You may shorten either period at any time. Note: If you pay your own property taxes, insurance, or HOA/condo fees separately from your mortgage, you must continue making these payments during forbearance. *Residential loans may be federally backed or non-federally backed. The CARES Act applies only to federally backed mortgages. The vast majority of borrowers in owner-occupied homes have federally backed mortgage loans. If you do not have a federally backed mortgage, other mortgage assistance options may be open to you, but different eligibility requirements may apply.

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Q: What are some examples of a forbearance plan? Example One: a 90-day forbearance

John's monthly mortgage payment is $1,500 and is due on May 1. He cannot make his May 1 payment but believes his hardship will be short-term. John chooses a 90-day forbearance in May, and it will run through July. During this time, his monthly mortgage payments are suspended. On August 1, when John’s 3-month forbearance has ended and he is able to resume his monthly payment of $1,500, the three suspended payments (totaling $4,500) must be addressed for repayment. John’s servicer will contact him about 30 days before his forbearance period ends, and they will work together to determine which repayment options are available to John. (See When will I need to repay the payments that were due at the end of the forbearance plan period? below, for details on options that John may have at this time.)

Example Two: a 180-day forbearance

Jane's monthly mortgage payment is $1,500 and is due May 1. Jane cannot make her May 1 payment and does not know how long her hardship will last. She chooses a 180-day forbearance in May, and it will run through October. During this time, her monthly mortgage payments are suspended and payments are planned to begin again November 1. However, in October it becomes clear to Jane that her hardship is not resolved, so she requests a forbearance extension. (She can ask for up to 180 additional days.) After forbearance, Jane will need to work with her servicer to determine what options are available for repayment. (See When will I need to repay the payments that were due at the end of the forbearance plan period? below, for details on potential options.)

Example Three: a forbearance with partial payments

Juan’s monthly mortgage payment is $1,500 and is due May 1. He cannot make his May 1 payment in full but can afford to pay $500 each month toward his mortgage payment. He chooses a 90-day forbearance in May and it will run through July. During this time, Juan pays $500 each month, which also equates to one full mortgage payment. Juan’s servicer will apply the $1,500 as soon as a full payment is collected, applying it to the oldest payment due date (May 1). Therefore, on August 1, when Juan’s 3-month forbearance has ended and he is able to resume the monthly payment of $1,500, the June and July payments totaling $3,000 must be addressed for repayment (See When will I need to repay the payments that were due at the end of the forbearance plan period? below, for details on potential options).

Q: Will there be interest or fees charged for missed payments during a forbearance period? No additional interest beyond your regular principal and interest payment will accrue, and no fees (including late fees) will be charged during your forbearance period. Q. How will my credit reporting be impacted by my forbearance plan? It won’t be. If your loan was current at the start of forbearance, it will remain in a current status for credit reporting throughout the forbearance period.

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If your loan was delinquent at the start of forbearance, it will remain at the same delinquent status throughout the forbearance period unless you bring your account current. Q: Do I need to cancel my automatic monthly draft if I am on a forbearance plan? If your automatic monthly draft was set up with us, we will stop drafting when your forbearance plan begins. There is nothing for you to do. If you set up automatic bill pay with your financial institution, you need to contact them directly to stop automatic drafting. Note: In order to stop an ACH payment, we need two business days advance notice. However, if you set up monthly drafting (bill pay) with your financial institution, you will need to contact them directly to stop automatic drafting. Q: Can I make full or partial payments during my forbearance plan period? If you’re able to make full or partial mortgage payments during the forbearance period, you can. Doing so will reduce the amount due at the end of your forbearance period. We will hold partial payments in an account until it contains sufficient funds to pay your oldest past-due monthly payment.

If there are funds in the account at the end of your forbearance period, they will be applied to your mortgage in accordance with your mortgage documents.

Example: Partial Payment

Juan’s monthly mortgage payment is $1,500 and is due May 1. He cannot make his May 1 payment in full, but can afford to pay $500 each month toward his mortgage payment. He chooses a 90-day forbearance in May. As a result, the forbearance period will run from May through July. During this time, Juan remits $500 each month, totaling $1,500 by July, which also equates to one full mortgage payment. Juan’s servicer will apply the $1,500 as soon as a full payment is collected, applying it to the oldest payment due date, which would be the May 1 payment. Therefore, on August 1 when Juan’s 3-month forbearance has ended and he is able to resume the monthly payment of $1,500, only the June and July payments totaling $3,000 must be addressed for repayment.

Q: Will I still receive billing statements during the forbearance? We are required to send you a billing statement for every billing cycle, even while you are on a forbearance plan. The statement will show your account history and total amount due. Please refer to your forbearance letter, which outlines the terms of your forbearance. Q: Will I receive letters advising me of the delinquency status? Yes, we are required to send certain letters, including delinquency letters, to ensure compliance with regulatory requirements. Please refer to your forbearance letter, which outlines the terms of your forbearance. Despite receiving these letters, you will not be required to make any payments during the forbearance period. Q: Will my escrow payments for taxes and insurance premiums continue to be paid out of my escrow account during my forbearance period?

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Yes. If your mortgage payment includes an amount set aside to pay taxes and insurance, those payments will be made and assessed against your escrow account. If your escrow account becomes depleted during your forbearance, your mortgage loan servicer will advance any escrow account shortage for taxes and insurance during the forbearance period. At the end of your forbearance, you will need to repay these advances. Depending on the type of mortgage loan you have, this shortage may be repaid through a replenishment of the escrow account, a repayment plan, or modification at the end of your forbearance period. If your monthly mortgage payment does not include an additional amount to pay taxes and insurance, you need to continue making those payments yourself during your forbearance. Q: How will I know my forbearance has been processed? Within 7 to 10 business days, you will receive a letter from us with all the details. We will also send you an email if we have your email address on file. Now is a good time to update your email address should you need to in your profile on the web site if you haven’t already. It will help us to keep in touch throughout your forbearance period. Q: What do I do if my forbearance period is ending and I am still facing a financial hardship? If you are still financially impacted by the coronavirus pandemic, for federally backed loans under the CARES Act you may request an extension of your forbearance plan up to an additional 180 days, for a total of 360 days. There will be no additional fees, penalties or additional interest (beyond scheduled amounts) added to your account. You won’t need any documentation to lengthen your forbearance period. You may also shorten your forbearance period at any time. Q: If my financial hardship has ended, my income has been restored, and I can resume monthly payments, what options are available to me to repay my forbearance? Once your financial hardship has ended, we will work with you to determine the available options based on your financial situation, state of residence, and the type of loan you have. Your options may include*:

1. Loan Reinstatement: If you can afford it, you pay all delinquent amounts at once, including the payments that became due during the forbearance.

2. Repayment Plan: A repayment plan allows you to repay all delinquent amounts gradually over a period of time in addition to your regular monthly payments. Portions of your repayment amount are added on to your monthly mortgage payment amount.

3. Deferral: A Deferral allows you to avoid having to pay your suspended mortgage payments all at once, typically by adding a non-interest-bearing balance at the end of your mortgage, repayable either at loan payoff (for example if you sell your home) or at maturity. Please be aware that should you be eligible for Deferral, you may only take advantage of this option once.

4. Loan Modification: Permanently change the terms of your mortgage to bring it current. 5. FHA Partial Claim or Partial Claim and Loan Modification: If you occupy your property, you may be eligible to

defer suspended payments. The COVID-19 National Emergency Standalone Partial Claim option says that if you’re less than 30 days delinquent as of March 1, 2020, you can defer suspended payments until your loan is paid off. If you occupy your property, you may also be eligible for a Loan Modification or both a Partial Claim and Modification together. Please be aware that should you be eligible for the Partial Claim, you may only take advantage of this option once.

6. VA loans: You may be eligible for a loan modification plan that would allow you to modify the terms of your mortgage to account for the suspended payments.

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7. USDA loans: You may be eligible for a loan modification plan that would allow you to modify the terms of your mortgage to account for the suspended payments.

*Available options may vary depending on the type of loan you have and/or guidelines of your financial institution. Additional eligibility requirements and documentation may be required.