Before Making Loans, Some Mortgage Lenders Ask, Do You Really Plan to Pay This?

New forms are showing up in some borrowers’ paperwork when they close on their home loan. Lenders are asking them to confirm that they don’t plan to skip their payments, at least not right away.

The $2 trillion coronavirus stimulus package Congress passed allows struggling homeowners to request up to 12 months of forbearance on federally backed home loans.

Photo: Michael Short/Bloomberg News

香蕉视频苹果下载Some mortgage lenders are asking customers taking out a mortgage to confirm they don’t intend to seek forbearance, a move meant to keep losses low during a pandemic that has put millions of Americans on shaky financial footing.

香蕉视频苹果下载The unusual requirement comes in the form of a new document included in many borrowers’ closing paperwork. While the language varies, the forms generally tell borrowers that they won’t be allowed to skip payments until their loans are backed by the government, according to forms reviewed by The Wall Street Journal. The forms, known among lenders as “Covid-19 borrower certifications,” often ask home buyers to confirm that they don’t expect changes to their income. Some warn of potential penalties if any of the certifications are later proven to be false.

The $2 trillion coronavirus stimulus package Congress passed in the pandemic’s early days allows struggling homeowners to request up to 12 months of forbearance on federally backed home loans, meaning they can temporarily pause their payments香蕉视频苹果下载 and make them up later. But it can take days, weeks or sometimes even months for a newly made loan to get government backing.

Lenders can still unload loans that are already in forbearance. Government-backed mortgage companies Fannie Mae and Freddie Mac said this spring they would begin to buy loans in forbearance, but at a discount of either 5% or 7% of the loan’s value, depending on whether the borrower is a first-time homebuyer. The Federal Housing Administration said it would insure loans in forbearance but could charge the lender a 20% fee if the loan goes into foreclosure.

Together, Fannie Mae, Freddie Mac and the government-owned mortgage company, Ginnie Mae, back more than 70% of outstanding U.S. mortgages, according to the Urban Institute, a nonpartisan policy research group in Washington, D.C.

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