November 8, 2021
If you have trouble making your monthly FHA mortgage loan payments, you are not alone. There seem to be so many borrowers struggling that the FHA and HUD have announced multiple extensions to COVD-19 mortgage forbearance policies.
Indeed, there have been so many updates and extensions to FHA loan policy in this area that it’s hard to keep it all straight. What’s the most current guidance from the FHA and HUD regarding those who need FHA loan forbearance due to COVID-19 pandemic issues?
On September 27, 2021, the FHA issued a Mortgagee Letter, FHA ML 21-24, which explains to lenders the current FHA policy toward such mortgage relief:
“Upon Borrower request, Mortgagees must offer a COVID-19 Forbearance to any Borrower that experiences an adverse impact on their ability to make on-time Mortgage Payments due to the COVID-19 pandemic, regardless of Default status.”
The FHA and HUD have made multiple statements on their official sites reminding borrowers that anyone with an FHA mortgage is eligible for such forbearance even if your home loan is currently delinquent.
But this relief is NOT automatic, must be applied for, and requires you to communicate with your lender and make arrangements with the loan servicer.
It’s important to keep an eye out for any communications your financial institution might send–and that communication could come in a variety of ways. According to the FHA and HUD you may be communicated with by phone, text, email, fax, or other means.
The FHA mortgagee letter reminds, “If a Mortgagee sends out a general communication
advising that a COVID-19 Forbearance is available, the Borrower may reply to that communication requesting a COVID-19 Forbearance via email, phone call, or any other method of communication clearly made available to the Borrower by the Mortgagee.”
What do you need to know about this FHA loan relief associated with the pandemic?
- The term of the initial and any additional COVID-19 Forbearance period may
be shortened at the Borrower’s request.
- Your lender is required to waive all late charges, fees, and penalties
- That waiver is applicable “as long as the Borrower is on a COVID-19 Forbearance Plan.”
- There is a time limit to receive this consideration.
What kind of time limit? FHA Mortgagee Letter 21-24 states clearly, “No COVID-19 Forbearance period may extend beyond six months after the end of the COVID-19 National Emergency or September 30, 2022, whichever is later.”
The “whichever is later” caveat is an important one–at the time of this writing the national emergency has not been declared over, so chances are good the deadline for this relief may be well into 2022.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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