Options for Borrowers Under Federally Backed Mortgage Forbearance Programs
During the current COVID-19 Stop Movement Order, many service members and families may have questions about how to manage their mortgage payments. For example, they may have to maintain households at two duty locations — their present duty location, where they are stationed until at least May 11, and their gaining duty location. Some members may have signed mortgages at their upcoming duty location, which they are now unable to occupy, and may be seeking relief from those mortgage payments.
First, the Servicemembers Civil Relief Act does not allow for cancellation of a mortgage obligation:
There is no provision under the SCRA that would allow a service member to cancel a home purchase (mortgage) obligation entered into at their new duty location. Section 3955 pertains to leased, not mortgaged, premises.
There are SCRA protections that prevent non-judicial foreclosure of premises mortgage prior to entry into military service. This means if a service member defaults on a mortgage obligation that they entered into before entering the military, the lender cannot foreclose without a court order; however, it does not mean the service member does not have to make their mortgage payments.
Mortgage forbearance relief may be available:
The Federal Housing Finance Agency is allowing borrowers to delay making monthly mortgage payments if the borrower is impacted by the COVID-19 pandemic. So far, this is only for mortgages backed by Fannie Mae or Freddie Mac (the enterprises managed by FHFA). If you are unsure if your mortgage is backed by Fannie Mae or Freddie Mac, visit the following websites:
- For Freddie Mac loans: https://ww3.freddiemac.com/loanlookup/
- For Fannie Mae loans: https://www.knowyouroptions.com/loanlookup
If you do have a mortgage backed by Fannie Mae or Freddie Mac, you can contact your mortgage servicer (the company where you send your monthly payments) to speak with them about your current circumstances and any available forbearance relief. The telephone number and mailing address of a loan servicer is listed on monthly mortgage statement.
Members and spouses can speak with a personal financial manager, personal financial counselor or the installation legal assistance office with questions concerning housing. To find support, visit the FINRED webpage and click on “Find a Personal Financial Counselor” at the top of the page. During COVID-19, PFCs are providing support virtually. Contact your installation Family Center or email osd.mc-alex.ousd-p-r.mbx.financial-readiness@mail.mil for information.
For more information, frequently asked questions and policies on how the DoD is responding to the COVID-19 pandemic, visit Defense.gov. Visit Military One Source for more resources to support military families at https://www.militaryonesource.mil/coronavirus.
For additional financial resources and information, follow the Office of Financial Readiness on Facebook, Twitter, YouTube, Instagram and the FINRED blog.
