Greetings from Fairway St Mary’s!
I hope that everyone enjoyed their holiday season. I had a wonderful time traveling with my husband and kids. I was happy to see that many parks like the Statue of Liberty and Ellis Island were still open due to funding by the NY state government, but I felt bad for the many federal employees that have to work without pay. Regardless of whether or not you agree with our politicians’ reasons for the government shutdown, we must agree that many families have unfortunately had to bear a burden and work without pay, and must wait for their paychecks until an undetermined time in the future.
When I returned I found many people asking about how the shutdown affects mortgages and home loans. Many people don’t realize how important government funding is for many mortgage programs. For our service members and veterans, VA loans are still funded as the VA has secured funding for FY19. With the DOD funded through the year, our service members can still obtain loans and pay for them. Unfortunately, our Coast Guard members are not being paid since they are part of the Department of Homeland security. My prayers go out to their families.
While the Department of Agriculture has been funded through February, the government is not funding USDA loans until further notice. To help our costumes, Fairway has extended the interest rate lock for USDA loans for 15 days at no cost, which hopefully will be long enough for the Department to secure funding for loans. FHA loans, thankfully, and still fully funded and continuing to be given to qualified customers.
What about loan payments? Many have asked if their payments can be deferred until the shutdown is over. Fairway originated mortgage loans are typically sold to investors and Government Sponsored Enterprises (GSEs) such as Fannie Mae or Freddie Mac. Any payment assistance options are limited to guidance and programs provided by investors/GSEs and loan agencies (FHA, VA). Fannie Mae and Freddie Mac have issued government shutdown payment assistance guidance in the form of a standard forbearance plan. The forbearance plan is a temporary reduction or suspension of mortgage payments for a specified period of time. Upon completion of the forbearance, additional options may be considered for reinstatement of any remaining past due amount. Although FHA and VA have not issued guidance, the forbearance plan would be a standard payment assistance approach for this type of financial hardship.
The key is to call your mortgage servicer and apply for one of these forbearance programs right away. If you are unsure about who your services is contact your loans officer and they can direct you to the right contact.
I’ve also been asked by customers if they can shift their payments to the end of the loan, as you can for credit cards or car payments. The issue is that home loans originated by Fairway Mortgage are closed-end amortizing loan products. This means the option to request “skip pays” is not available. Skip-pay or re-aging options are not available under investor and agency guidelines on closed-end single-family mortgage loans. Unfortunately, no options are offered that provide forgiveness of missed payments.
As always, your best bet is to contact your lender and discuss all of your options with them. We all understand that this is a difficult time for many families and will do our best to support you and all our customers with their needs.
Call me at 912 227 2447 at any time to help where i can!
Mariem Bennett with Fairway Independent Mortgage.