Peggie Simmons WHAT IS PAYMENT DEFERRAL DURING COVID-19? The Coronavirus pandemic has caused financial distress to millions of individuals across the United States. With unemployment rates staggering at 20 percent, which is an all-time high to be witnessed ever since the great depression, millions of families are facing financial hardships during this crisis. According to recent research by the Pew Research Center, nearly half of the Americans today consider the pandemic to be one of the ma jor threat to their financial freedom, and it makes much sense because between March 15 and April 4, nearly 17 million people in the country filed for the Unemployment benefits. In response to the struggling homeowners, the government ha provided several mortgage relief options, and among them is the payment deferral during this crisis. However, nor so many people understand what a payment deferral is, or how they stand to gain from it. While one of the most common options for the homeowners is the forbearance, homebuyers and homeowner are being offered with a payment deferral option once they have resolved their COVID-19 related hardship.
WHAT IS COVID-19 PAYMENT DEFERRAL? It was just announced recently as an assistance program for the homeowners who are already suffering from the COVID-19. The Payment Deferral solutions return as the homeowner’s monthly mortgage payment to its preCOVID amount by adding 12 months of missed payment at the end of their mortgage period. It could be less than 12 months, but it cannot exceed 12 months.
It is important to note that for the deferral period, the amount accrued will not carry any interest to the borrower. “This will ensure your mortgage is current once you are back on your feet and when other options, such as a repayment plan, are not feasible.” HOW DO YOU KNOW IF YOU ARE ELIGIBLE? Starting July 1, 2020, the COVID-19 Payment Deferral will be available to the homeowners with Freddie Mac loans. During this time, your loan servicer will begin evaluating your eligibility for the program. “Your servicer will contact you about 30 days before the initial forbearance plan is scheduled to end to determine which Freddie Mac assistance program is best or if additional forbearance is needed.” l
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