Millions of homeowners have been excluded from federal protections providing pandemic-related mortgage-payment relief. Now, many who have suffered setbacks during the public health emergency find their homes are at risk, MarketWatch.com reported. While homeowners with mortgages backed by the federally chartered Fannie Mae or Freddie Mac or by the federal government can qualify for up to 18 months of pandemic-related forbearance and are shielded by a foreclosure moratorium that extends through the end of June, among other protections, there’s no nationwide relief for loans that are not federally backed. The result: Non–federally backed borrowers are sometimes offered only short-term payment suspensions and relatively unaffordable repayment plans, and, in the worst cases, they’ve received no relief and lost their homes midpandemic. Their fate often depends on the identity of the loan holder. Many of these loans are held in bank portfolios, where the bank has considerable discretion to offer the type of relief it sees fit, while others are owned by smaller investors or packaged into private-label securities, where the deal documents can govern what types of relief servicers can offer to borrowers.
