Some homeowners with federally backed mortgages may soon be able to pay off the balance over a period of as long as 40 years, as part of one modification being considered to help those impacted by the pandemic.
According to The Houston Chronicle, the option of extending a typical mortgage term was floated by federally backed mortgage lender Ginnie Mae as a way to work with homeowners who suspended or reduced mortgage payments during the pandemic. This workaround came about because the federal government is requiring the companies servicing mortgages it backs to find a way to get homeowners back on track without requiring all missed payments to be paid in one sum.
Ginnie Mae expects it will be ready to begin supporting the securitizing of such loans by October. But the final decision of whether to offer the option of a 40-year mortgage to homeowners exiting forbearance lies with the Federal Housing Administration, Department of Veterans Affairs, the U.S. Department of Agriculture, the Department of Housing and Urban Development and the Office of Public and Indian Housing, which make the loans that Ginnie Mae pools together to sell in the secondary markets. Read the full story.