As the coronavirus pandemic continues to affect homeowners nationwide, regulators are making changes to keep Americans in their homes. This week, Fannie Mae and Freddie Mac announced numerous actions to protect those affected, either directly or indirectly, by the novel coronavirus.
Included in the GSEs' announcements is a reminder that homeowners impacted by this national emergency are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.
“We are doing all we can to help those adversely impacted by the coronavirus, including by immediately suspending foreclosure sales and evictions during this challenging time,” said Donna Corley, EVP and Head of Freddie Mac’s Single-Family business. “These eviction and foreclosure stoppages are just one part of the comprehensive assistance we’re providing borrowers to help protect our communities. We are also expanding relief available through our well-known forbearance programs, allowing us to reach the majority of affected borrowers as expeditiously as possible.”
FHFA Director Mark Calabria discussed with CNBC how forbearance will impact the credit scores of borrowers.
“If you’re in a forbearance plan and you’re meeting the terms of that plan, it will not be reported to your credit bureau, there will not be a ding on your credit,” Calabria said. “If you don't reach out to your lender and get a plan and don’t pay, you will get hit.”
Alongside the GSEs' announcements, the House Financial Services Committee released plans for a legislative package to provide a comprehensive fiscal stimulus and public policy in response to the coronavirus pandemic.
“As the COVID-19 pandemic continues to spread, we have seen the devastating effects on workers, consumers, investors, markets, and the economy,” said Congresswoman Maxine Waters, Chairwoman of the House Committee on Financial Services. “Low income communities were already struggling before this crisis began and will likely be hit particularly hard by the coming recession. This is an urgent public health crisis that has quickly harmed our entire economy, and it demands swift and bold action. The Financial Services Committee will play a central role in that response."
The committee’s response includes at least $2,000 per month for all adults and $1,000 for each child, and a suspension on all consumer and small business credit payments and negative credit reporting, including mortgages.
Shortly after the Financial Services Committee announced their plan, Committee Member Ben McAdams announced that he has been diagnosed with COVID-19.
“I and my colleagues are all wishing Representative McAdams a speedy recovery and good health,” Chairwoman Waters said. “As a new Member of the Financial Services Committee this Congress, Representative McAdams is a tireless, hardworking advocate for Utahns, and it is no surprise that even now he is working from home to help his constituents.”