As part of its “Navigating and Understanding the End of Pandemic-Era Homeowner Protection Programs” (21-CU-09, blogged about here), the NCUA published a set of FAQs regarding the end of COVID-19 forbearance programs and foreclosure and eviction moratoriums. The 3-questions are targeted toward credit union members, but credit unions could benefit from knowing the information provided.
The first question discusses available options for members whose forbearance period is ending, and want to stay in their home. NCUA lays out four post-forbearance options (from the CFPB), the circumstances under which each option might be right for a particular member, and how each option works:
- Repayment Plan – good for members who can afford to pay more than their regular mortgage payment for a few months, since a portion of the amount owed gets added to each monthly payment, until the loan is caught up.
- Deferral or Partial Claim – good for members who can resume regular monthly payments, but cannot afford to increase them. A deferral will move the missed payments to the end of the loan, while a partial claim will put the missed payments into a subordinate lien repayable only when the member decides to refinance, sell, or terminate the mortgage.
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