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Why We cannot just be relieved of our payment responsibility.

Updated: Apr 29, 2020

Freedom Mortgage provides a great explanation of why homeowners who have Federally Backed Mortgage Loans still have our payment obligations during this pandemic. A homeowner cannot be relieved of the obligation of making a payment. Under the CARES Act, Freedom Mortgage is offering forbearance. Please find additional information from Freedom Mortgage COVID19 Alert page.

Why don't you just relieve me of my payment for a while?

Freedom Mortgage does not have the right to relieve you of your mortgage payment obligations without the approval of the federal agencies for which we provide servicing activities. We service your mortgage for the government-sponsored enterprise or housing agency that owns your loan (e.g., Fannie Mae, Freddie Mac, VA, FHA, USDA or other) and they require us to collect payments from borrowers like you on their behalf. That is why we are working closely with these agencies and housing authorities to understand what new programs they may develop for our customers who are experiencing a financial hardship as a result of COVID-19. We will continue to update this information as we receive guidance from the federal agencies.

Forbearance for customers experiencing financial hardship from COVID-19

If you're not able to make your regular mortgage payment because of hardship related to COVID-19, Freedom Mortgage can provide you with short-term help. We can provide you with a forbearance, which is a temporary pause of your mortgage payments. Please note that a forbearance is not a waiver of payments or a forgiveness of any portion of your debt. And as we stated above, we're waiting for guidance from the government agencies on what options will be available to you after a forbearance ends.

What should I know before accepting your Forbearance Plan?

· If you can continue making your payments during your Forbearance Plan, even if it is just a partial payment, it's in your best interest to do so. The fewer missed payments means you'll owe less down the road.

What is a Forbearance Plan?

· A Forbearance Plan allows you to suspend making your mortgage payment for a limited time.

· A Forbearance Plan doesn't erase what you owe — you'll have to repay any missed payments in the future.

· If your income is restored during the term of your Forbearance Plan and you want to resume making payments, contact us. The fewer missed payments means you'll owe less down the road.

· The Consumer Financial Protection Bureau (CFPB) has a useful video that explains forbearance as it relates to the Federal CARES Act. See below for additional information on what happens after the forbearance period.

What are the benefits of a Forbearance Plan?

· Lowers or temporarily suspends your monthly payment—giving you time to improve your financial situation and get back on your feet.

· Suspends any negative credit reporting during the time period in which you are on the Forbearance Plan.

What happens at the end of my Forbearance Plan?

· Your Forbearance Plan is only a temporary suspension of payments. We will need to work with you near the end of your Forbearance Plan to find another solution for the long term.

· While paying the suspended payments in one lump sum is an option, we understand that you are experiencing a financial hardship and this option may not be realistic.

· At the end of your Forbearance Plan, there may be other options available, such as a repayment plan or loan modification, to help you catch up on the payments that were suspended.

· The options that may be available will depend on the government-sponsored enterprise or housing agency that owns or guarantees your loan (such as Fannie Mae, Freddie Mac, VA, FHA or USDA). Many government-sponsored housing agencies already have available loss mitigation solutions and they continue to provide more options for consumers who are unable to make their payment because of COVID-19/Coronavirus.

· For example, Fannie Mae and Freddie Mac offer the option of placing the suspended payments to the end of the loan and/or by adding suspended payments to your principal balance through a loan modification. FHA has made available a special COVID-19 Partial Claim for some FHA insured loans that will move suspended payments to the end of your loan and/or FHA also has a streamline loan modification that is also available. The other housing agencies have standard loss mitigation solutions available and we know they are exploring additional options specifically for borrowers impacted by COVID-19 that may be available at the end of your Forbearance Plan.

· Action will be required on your part — We will make contact with you near the end of your Forbearance Plan to understand your circumstances at that time and will work with you to find a solution. If you do not take any further action, all amounts suspended under your Forbearance Plan may be due in a lump sum at the conclusion of your forbearance period.

Can I extend my Forbearance Plan beyond the initial timeframe?

· At the end of your plan, you'll have the option to extend your forbearance. This may be right for you if you need more time before resuming payments.

· If you extend your forbearance, you'll still need to work with us to explore options available to you when your plan ends.

· Note: The options that may be available at the end of your Forbearance Plan may vary if your loan was already delinquent prior to your Forbearance Plan due to a hardship not caused by COVID-19. If your loan was delinquent before you entered into your COVID-19 Forbearance Plan, the options mentioned above may not be available to you and you may have to complete a loss mitigation application to determine which options may be available to you. If you're in an active bankruptcy, we recommend you speak with your bankruptcy attorney to see what options may be available to you.

Source: Freedom Mortgage.

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