WHAT HAPPENS AT THE END OF A COVID-19 FORECLOSURE FORBEARANCE?

Can servicers demand a large balance?

Generally, the servicers should not be demanding full payment following a COVID forbearance. There are a number of loss mitigation options for people coming out of a COVID forbearance. In order to know which may apply one needs to know who owns the loan (who is the investor). Is it a GSE, FHA or private label loan?

National Consumer Law Center “NCLC” has a summary chart of the options available for borrowers facing a COVID-19 related hardship.  The options that they can access depend on the loan investor. In addition to the forbearance protections provided by the (CARES) Act, Fannie Mae, Freddie Mac, FHA, VA, and USDA borrowers all have access to expanded options provided by their investors. These programs are discussed in greater depth in Chapter 12 of Mortgage Servicing, which will be freely accessible during the COVID.

NCLC’s Summary of Foreclosure Alternatives

COVID-19 FORBEARANCE OPTION CHARTS FEDERALLY-BACKED MORTGAGES