The Idaho Housing and Finance Association services about 50,000 home loans across the state of Idaho, and Director of Loan Servicing Chuck Kracht said approximately 2,000 of those loans have gone into forbearance during the past year of the pandemic.
Nationwide, about 2.5 million home loans are in forbearance status.
“A lot of people never heard that term (forbearance) before COVID, so we spent a lot of time educating our customers about what a forbearance plan is,” Kracht said.
Forbearance allows a homeowner to “put a pause button” on mortgage payments while dealing with job loss or an illness so they don’t have to worry about losing their home. The moratorium issued by the Centers for Disease Control is meant to prevent foreclosures on occupied homes for non-payment during the pandemic as well, in addition to protection from negative credit reporting and late fees. The order was set to expire today, but on Monday the government extended it to June 30.
With funds provided by the CARES Act, Idaho Housing and Finance has been able to offer six-month forbearance plans with an option to extend a plan another 180 days. Prior to the bill’s passage, extensions could only last 90 days.
“So as soon as a customer found out they were going to be affected by COVID-19 … they could let us know and we could immediately put them on a forbearance plan,” Kracht said.
As of two weeks ago, Kracht said, the U.S. Department of Housing and Urban Development and Fannie Mae and Freddie Mac have extended their forbearance periods again for two additional 90-day periods, so homeowners have a total of 18 months they can postpone payments.
While full repayment is an option when a loan exits a forbearance period, Kracht said that becomes unrealistic for most people after many months of non-payment. Borrowers have the option of a payment plan or deferring payments and extending the length of the overall loan.
If a borrower can no longer afford the mortgage they had, Kracht said they are also able to help with a loan modification plan that can extend the term and reduce the mortgage payment if necessary.
Much is unknown about how Idaho’s funds from the American Rescue Plan Act, the stimulus package passed on March 11, will be allocated. The bill itself set aside $100 billion in mortgage assistance, but details on how Idaho plans to use that funding are yet to be determined.
“That would be the part I’m most anxious for, is to see how that would provide additional help to homeowners here in Idaho, because that would be a huge benefit to them to be able to take advantage of that,” Kracht said.
NEED A PLAN?
For information on how to enter a forbearance plan with the Idaho Housing and Finance Association, call 855-505-4700.
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