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COVID19 Q&A Penny Mac Loan Services, LLC

From the Penny Mac Loan Services website. COVID19 mortgage assistance and links for their customers

As COVID-19 (Coronavirus) continues to affect our country, your PennyMac family is here to support you.

We recognize many of you have had long call wait times or have not yet had a chance to speak with one of our PennyMac team members. We encourage you to access the tools available to you online to get information quickly.

At PennyMac, we’re committed to doing the right thing for our customers, and we will continue to be here for you. Please be safe and take care of yourself and your loved ones.

Mortgage Relief

If I am unable to make my mortgage payment as a result of being affected by COVID-19, what relief or payment solutions are available to me?

If you’re experiencing financial difficulty as a result of COVID-19, we have a solution for you. It’s called a short-term forbearance—a plan that provides temporary relief by allowing you to pay reduced, or even no, payments for a brief time, depending on your individual situation, along with protection from late fees and negative credit reporting.

Getting set up with a forbearance plan is easy. You have two options:

· Recommended: Log into your account and fill out our brief survey: Log in now

· Call (800) 777-4001 and follow the prompts for our automated system.

What if I’m unsure about my ability to pay my mortgage in the future?

We’re committed to helping all of our customers who are experiencing financial difficulty as a result of COVID-19. When you have a better understanding of your financial situation, we’ll be here to help and the forbearance programs will continue to be available.

What are other resources for information?

You can also find HUD-certified approved housing agencies in your area by calling the US Department of Housing and Urban Development at (800) 569-4287 or visit

Understanding Forbearance Further

What is the difference between a forbearance plan and payment deferral?

A forbearance provides temporary relief by reducing or suspending your payments for a brief period of time, depending on your individual situation. Toward the end of your forbearance period, we will reevaluate your situation to determine the best program to repay those missed payments.

A payment deferral is an agreement to pay the past due amounts at a different time. This may be an option for you at the end of your forbearance period based on your unique circumstances and loan program. However, it may not be the best solution if you need a more permanent payment reduction or have an extended need for forbearance.

Will there be a lump sum immediately due at the end of my forbearance?

While a lump sum payment is certainly an option, it’s not the only option. Once you’re able to resume making full payments, you can opt for a repayment plan and add extra money to your monthly mortgage payments in order to pay off the amount owed from the forbearance period. Or, you can look into a loan modification, whereby PennyMac rolls the balance back into the mortgage. No matter which option you choose, assistance programs will allow you to repay the missed payments over time.

Since you and PennyMac don’t know exactly when this particular hardship will end, we don’t know which long-term relief option will best fit your situation. Today, you won’t be expected to know how much you’ll be able to pay when your forbearance plan ends, or when you’ll be ready to resume regular payments. Rest assured, we’ll work with you toward the end of your plan to determine the best program for your situation. The missed payments during the forbearance plan will not be immediately due after your forbearance plan ends if you are unable to repay the full amount of those missed payments.

What if I need even more time to resume my mortgage payments?

If you still aren’t ready to resume making monthly payments at the end of your forbearance plan, you can request an extension of your plan for another three months. Extensions will be available through a maximum 12-month forbearance term upon a showing of continued hardship.

For homeowners who require more permanent payment reductions, loan modification programs are available that may extend the term of your loan and/or reduce your interest rate to lower your payments. Modification programs do require proof of reduced income. All assistance programs will allow you to repay the missed payments over time.

Will there be interest or fees charged for the missed payments?

No additional interest beyond your regular principal and interest payment will accrue, and no fees will be charged for our assistance programs.

Are most banks deferring payments to the end of the loan?

Actually, the majority of banks are not saying they will defer payments to the end of the loan. Most mortgage loans serviced in the U.S. are part of programs sponsored or insured by the federal government. These include loans owned by Fannie Mae and Freddie Mac, and loans insured or guaranteed by the FHA, VA or USDA. Together, these loans make up more than two-thirds of all mortgage loans in the U.S. today. These government-related agencies do have programs that allow missed payments from forbearance plans to be moved “to the end” of the loan; however, they involve either a new note and second lien against the property in the amount of the missed payments, or an extension of the maturity date of the loan. The programs available are unique to each of these agencies and require a review of individual circumstances to determine which program will best resolve the homeowner’s hardship. For example, many customers require more permanent relief through a loan modification to lower their payments, and others have the ability to make payments through a repayment plan.

Some banks own their own loans, which provides them the ability to solely determine how they address missed payments. However, they also service loans for the federal agencies described above and are limited to offering those agencies’ programs on those loans. We encourage you to work with us. You can feel confident we will offer you the best program available to meet your individual needs.

How is my credit reporting impacted by my forbearance plan?

If your account was current prior to January 31, 2020, PennyMac will continue to report your loan as current to the various credit agencies during the forbearance plan. If your account was delinquent prior to January 31, PennyMac will continue to maintain the delinquent status reporting to the credit bureaus during the forbearance plan unless you bring your account current during the plan period, at which time PennyMac will report your account as current.

Can I make full or partial payments during my forbearance plan period?

Yes, you certainly can. Although you’re not required to make full or partial payments during your forbearance plan period, we appreciate any payment you can afford because it will reduce the amount you’ll be required to repay later.

Will I qualify for a refinance if I enter into a forbearance plan?

You will not be able to qualify for a refinance until your plan is completed and your payments are brought fully current.

Why is my forbearance plan 90 days when I thought I can request up to 180 days?

This is a question many homeowners are asking. The CARES Act, which is a new federal law enacted to address COVID-19, allows homeowners whose income has been impacted by COVID-19 to request forbearance assistance for “up to” 180 days. The “up to” portion of the Act is important. Forbearance plans are intended to last only as long as you actually have a financial hardship, which could be less than 180 days. So, PennyMac begins your forbearance with a 90-day period to ensure we don’t overestimate the length of your hardship. After 90 days, if you’re still having financial difficulties, simply reach out to us and ask for an extension. You’ll be able to extend the forbearance plan for another 90 days (up to a maximum of 12 months).

We’ll stay in contact with you before your plan ends for an updated understanding of your individual situation and to determine how you can best repay your missed or reduced payments. Keep in mind, it’s crucial to end your forbearance plan as soon as you can start paying your mortgage again. Letting the plan continue will only increase your financial burden down the road, and that may require more permanent relief efforts (such as a loan modification), which could impact your credit.

Source: Penny Mac Covid19 FAQ

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