Perspectives
September 22, 2020

In Times of Crisis, #HelpStartsHere

Donna Corley
By
Donna Corley, Executive Vice President, Head of Single-Family Business

There’s no question that the COVID-19 pandemic has caused unprecedented economic hardship for so many, including those struggling to make their mortgage payments. That’s why Freddie Mac has joined with our clients to quickly provide affected homeowners with options to stay in their homes.

While the number of homeowners needing assistance has declined, we still have significant work to do. Our #HelpStartsHere initiative arms owners with the knowledge they need to make proactive and informed decisions now and in the future. Here’s what you need to know.

If you need help now

If you can’t make your monthly mortgage payment due to a COVID-19-related hardship, contact your Servicer – the mortgage company you send your monthly payment to – immediately. Ask about a forbearance option, which temporarily suspends or reduces your mortgage payment without penalty so you can get back on your feet. Tell your Servicer about your specific situation so they can provide you with the best and most appropriate mortgage relief options to help you get back on track.

Remember, if you’re having a hardship you are not alone. Hundreds of thousands of homeowners have reached out to a Freddie Mac Servicer to get started with a forbearance plan.

A few important items to remember about forbearance:

  • Homeowners with a Freddie Mac loan are entitled to up to 12 months of forbearance in increments up to 6 months.
  • Don’t stop making your mortgage payments until you have been granted a forbearance plan. 
  • Mortgage forbearance is not the same as mortgage forgiveness. You will need to make up the missed payments when the forbearance period ends. But don’t worry, you have options and never have to repay what you owe in one lump sum.
  • Reach out to your Servicer and resume making payments as soon as you can. Do not wait until the end of your forbearance period.

Your post-forbearance options

Once you get back on your feet and can start making your mortgage payment again, Freddie Mac has several post-forbearance options.

No less than 30 days prior to the end of your COVID-related forbearance, your Servicer will contact you proactively about your post-forbearance options – by phone, in person (if safe) or in writing. They will work with you to assess your situation and determine next steps. 

The options available to you, including additional forbearance if needed, include:

  • Reinstatement. The option for a lump sum payment is available, but never required if your loan is owned by Freddie Mac. If possible, however, it is the fastest way to get back on track. 
  • Repayment plan. You pay more each month on top of your existing mortgage payment to make up the missed payments.
  • COVID-19 Payment Deferral. This option is available if you can resume making your regular monthly payment. With payment deferral you become immediately current on your mortgage and missed payments are added to end of the mortgage term without interest or penalties.
  • Loan modification. If you’re facing a long-term financial hardship but can make a reduced mortgage payment, a modification may be the option that’s best for you.

To date, tens of thousands of homeowners have successfully used one of these post-forbearance options to get back on track. Our Servicers are well-versed in Freddie Mac’s post-forbearance relief options. And you don’t have to wait for your Servicer to contact you, especially if you can resume making your payments before your forbearance period ends.

Tools to help you

Here are some important tools that will help you now and later.

  • Find out if Freddie Mac owns your loan, which ensures these and other options are available to you.
  • Visit our interactive #HelpStartsHere guide to learn about your options even before you contact your mortgage servicer. This valuable resource walks you through what you should do, whom to contact and other important steps to help you through this difficult time.
  • And for your ultimate guide to home, visit My Home by Freddie Mac

I hope you’ll be one of the more than 15 million consumers who have turned to these resources to get more information since the pandemic started.

The COVID-19 pandemic has highlighted Freddie Mac’s role of providing stability and liquidity to the housing market and the important role we play in a time of crisis. I’m proud of how fast Freddie Mac worked to provide support to nearly a million homeowners facing financial difficulty as a result of the pandemic.

We’re committed to sticking by them – and others who may face hardship—until we are all through this crisis and they are back on their feet.