Realtors and Home Buyers: Good News on the Forbearance Front

Filed under: Market Comentary

We heard a great update last week from Fannie Mae and Freddy Mac regarding conventional loans. We are finally going to be able to let loose a bit to get some of the loans going again if they went into forbearance.

A bunch of information was released, but the most important thing applies to those looking to buy homes who have already requested a forbearance

Forbearance Requests on Credit History

Interestingly, it sounds like over 40% of those who requested a forbearance continued making their payments. Apparently, anyone who even called about it was automatically put in forbearance and the note was added to their credit. Until now, that has been a real problem for conventional lending.

Last week Fannie Mae made an announcement and changed things up a little bit. If you did request a forbearance, but you can show that you are current on the loan, then there will be a way to get those people financed again right away.

This news is great for people who are in the situation where they are selling one house where they requested forbearance, and now they are ready to buy a new home. It’s a home-run for those people.

Forbearance Was Essential for Some People

Forbearance was pitched as something that would be great for everybody, and there were going to be no credit repercussions. So, a lot of people jumped on the option (or just called for more information). Of course, some people really needed the cash flexibility, but others were just evaluating potential solutions.

Now, if you can show that you are current and you’ve made the back-payments, then you are still going to be in good shape in terms of getting a loan for the next purchase. This is great news for many people. With this change, I’ve been working with three people who were able to access more financing options when they previously were running into issues.

Forbearance is super important since it is impacting so many people. So, please share this information with everyone you know that owns a home or is thinking about buying. As always, I’m happy to answer individual questions – feel free to reach out at any time for information.

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