Mortgage Industry Proposes Plan for One-Year Payment Deferrals
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Mortgage industry trade groups proposed a plan for helping borrowers unable to make their payments because of the coronavirus pandemic that includes deferrals of as long as a year.
The groups, which include the American Bankers Association, the Mortgage Bankers Association and the Housing Policy Council, sent federal agencies a list of proposals aimed at homeowners affected by illness or quarantine that results in a loss of income.
Mortgage servicers would provide an initial 90-day forbearance that could be extended to 12 months, according to a statement Monday from the Housing Policy Council.
“The program is intended for those who are currently facing an income disruption as a direct result of the coronavirus,” the council said in the statement. “Homeowners capable of making their mortgage payment should continue to do so in order not to place undue demands on very tight human and financial resources needed for this program.”
The groups also urged policy makers to include a liquidity-funding program to help servicers “advance these payments at the extraordinary rate that we are going to need.”
If 25% of the nation receives forbearance for three months, servicers would have to cover payments of roughly $36 billion, according to the groups. For nine months, the cost would exceed $100 billion.
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