Homeowners who request relief from their payments on their federally funded mortgages amid the coronavirus pandemic won’t be penalized for it in the long run, the federal government announced on Tuesday.
Earlier in March, the federal government assured homeowners with these loans that they wouldn’t lose their homes, incur fees, or have their credit scores damaged if they couldn’t make their payments—as long as they entered a lender-approved forbearance program. Typically, forbearances are doled out in three-month chunks for up to 12 months.
But that forbearance has been showing up on these borrowers’ credit reports, making it nearly impossible for many of them to refinance their mortgages into lower monthly payments or qualify for a loan on a new property, say if they get a job in another city. Traditionally, owners who resorted to a forbearance program had to make up the skipped payments and then wait a year before