Facing Financial Hardships
COVID-19 mortgage payment assistance is available.
Flagstar Bank is committed to helping you during this difficult time, and we are complying with the CARES Act, the stimulus package recently made law by the federal government on March 27. If your ability to pay your mortgage has been impacted by COVID-19, Flagstar is offering eligible customers immediate relief by way of a six (6) month forbearance plan. Customers who opt-into this plan will have at least 180 days of late fee waiver, and suspension of all negative credit reporting. At the end of the forbearance period, there may be longer term solutions available, including loan modifications which can extend the term of your loan and cure your past due balance.
When you regain employment or replace your income, (whether that is during the six month forbearance period or thereafter), you will work with our COVID Relief Task Force to reset your loan to fit your new circumstances. Options will vary by your loan type, owner, and how many payments are missed. If you are unable to repay your missed payments, your options will include things like extending your loan by adding the missed payments on the end of the term, dividing up the missed payments over the remaining term, or simply paying what has been missed to bring you current. If you are not ready to resolve your delinquency after six (6) months of forbearance, you may request an extension to this plan for up to an additional six (6) months.
Check out our infographic to learn more about the forbearance process.
Ready to end your COVID-19 forbearance? Please log in to MyLoans and check-in with us.
CARES Act:
What you need to know from the CFPB
If you are experiencing difficulty making on-time mortgage payments due to the national coronavirus emergency, forbearance may be an option for you. Forbearance can help consumers get back on their feet during short-term financial difficulty, but there are a few things you need to know and some important decisions you’ll need to make.
Forbearance is when your mortgage servicer, that’s the company that sends your mortgage statement and manages your loan, or lender allows you to pause or reduce your payments for a limited period of time. Forbearance does not erase what you owe. You’ll have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.
The types of forbearance available vary by loan type. If your mortgage is backed by the federal government—this includes FHA, VA, USDA, Fannie Mae and Freddie Mac loans—provisions of the recently enacted CARES Act allow you to suspend payments for up to twelve months if you are experiencing financial difficulty due to the impact of the coronavirus on your finances.
Loan servicers may also have forbearance or deferment options for non-government backed or private loans, but the exact options available to you may differ.
Here’s how this works for federally-backed mortgages under the CARES Act. If you are experiencing financial hardship due to the coronavirus pandemic, you have a right to request forbearance for up to one hundred eighty days. You also have the right to request an extension for up to an additional one hundred eighty days. But, you must contact your loan servicer to request this forbearance. There won’t be any additional fees, penalties or interest added to your account. But, your regular interest will still accrue.
Other than telling your servicer that you have a pandemic-related financial hardship, you won’t need to submit additional documentation to qualify for this forbearance.
It’s important to find out what options are available to you. The best place to find that information is from your loan servicer. Look for their contact info on your monthly mortgage statement. Right now, most financial institutions, including mortgage servicers, are experiencing high call volumes, so there may be long wait times to talk to someone on the phone.
Regardless of the type of mortgage you have or how you communicate with your servicer, here are some things to consider.
If you cannot make your mortgage payments, and you are looking to suspend or reduce your payments, you will need to work with your servicer. If you decide to move forward with a forbearance plan, ask your servicer how you will be required to pay back the amount owed after the forbearance period.
Will you owe the entire unpaid amount in a lump sum once the pause period has ended or at the end of the loan term?
Can the loan term be extended so that missed payments are added to the end of your mortgage?
Will your subsequent monthly payments be higher for a period of time to make up the deferred amount?
Finally, be on the lookout for scams and scammers looking to take advantage of consumers affected by coronavirus. You might receive fraudulent calls, emails, text messages or other “offers” to help you reduce or stop your mortgage payments. Make sure you are working directly with your mortgage servicer.
Other important things we are doing to help:
- Flagstar is waiving all late fees and pay-by-phone fees for all eligible COVID-19 impacted consumers for at least 180 days.
- Flagstar is offering all loss mitigation and other hardship solutions authorized by all investors/insurers (FNMA, FHLMC, HUD, USDA, VA). Further, Flagstar continues to monitor federal and state law for all mortgage relief authorized for COVID-19 impacted customers, and will offer each solution authorized by law.
- Flagstar has suspended foreclosure, eviction and repossession activity in accordance with investor/insurer guidelines through August 31, 2020, or longer if authorized by state or federal law. Flagstar continues to monitor all state law, federal law, and investor/insurer guidelines for mortgage relief available to consumers, and will ensure strict adherence to all moratoriums.
Visit the CFPB's website to learn more about coronavirus relief options.
COVID-19 Forbearance FAQs
In order to make sure the new terms fit your situation, we will want to work with you to evaluate the payments and term against your restored income/employment. Once those are in place, we can begin that reset. Forbearance is designed to give you time to get ready. Prior to restoring employment or income, the only solution that we can offer is a forbearance, or option where home retention does not occur (short sale or deed in lieu).
Opt-ing in to a forbearance plan does not stop your auto-pay or scheduled payment plan. If you are unable to make payments during this time, we would recommend that you cancel your ACH payments and/or Autopay with your financial institution.
We encourage you to continue to make payments when you can during your COVID-19 forbearance plan to the extent that you are able.
Forbearance is a first step toward resetting your loan. It is a “time out” during which you are protected from late payment fees and negative credit reporting, allowing you to focus on dealing with employment and income.
The purpose of a forbearance is to give you peace of mind, right now, and give you the opportunity to earn an income and/or have an ability to re-pay again. When that happens, we have assembled a special team to help you reset your payment obligation associated with your mortgage.
Put simply, this team will help you find the best solution for your total picture when you are able to make a payment again.
If you were experiencing delinquency prior to COVID-19, and require a more permanent loss mitigation solution, please submit a loss mitigation application by following the details provided below regarding financial hardships.
At Flagstar Bank, we understand that unexpected financial hardships can strain even the most carefully managed household budget to the breaking point. If you have recently experienced a financial hardship and can't make your mortgage payment, Flagstar Bank has several financial hardship workout options available that may help you.
A FINANCIAL HARDSHIP COULD INCLUDE:
- Job loss or out-of-state transfer
- Reduction in hours or rate of pay
- Illness or disability affecting you or someone in your immediate family
- Divorce or other marital difficulties
- Being called to active duty as a member of a military reserve unit
To begin a financial hardship workout, print and complete the Loss Mitigation Application.
Then choose one of the following options:
Option 1: Upload the application and supporting documents through MyLoans.
Option 2: Fax the application and supporting documents to: (866) 234-9845.
Option 3: Mail the application and supporting documents to:
Flagstar Bank
Loss Mitigation Department
W-110-2
5151 Corporate Drive
Troy, MI 48098
If you have any questions, please call us at (800) 393-4887, Monday-Friday 8:30 a.m.-9 p.m. ET. Or visit the Mortgage Payment Relief section of our FAQs page for answers to frequently asked questions. To find a HUD-approved housing counseling agency, please call HUD at (800) 569-4287 or visit the HUD counseling website.
Common financial hardship options:
How it works: Temporarily suspends all or a portion of your monthly payment, followed by a formal plan using another option listed here to return your account to a current status.
Best used when: Your hardship is expected to be short term in nature, or you know that you will be able to pay a particular amount on a specific future date and continue with your payments from that point forward.
How it works: Adds a portion of past due amounts to your regular monthly payment until your account is current.
Best used when: Your hardship is expected to be short term in nature, and may even be over, and you have the ability to make an increased payment for a short period of time.
How it works: Allows you to sell your home for its current value, even if it is worth less than what you owe.
Best used when: You cannot make any payment but want to avoid foreclosure.
How it works: Makes your payment more affordable by permanently changing one or more of the terms of your original note and mortgage. Delinquent amounts can sometimes be added back into the loan balance.
Best used when: You can afford a reasonable payment that is less than your current payment and/or you don't have enough cash to bring your loan current.
How it works: Transfers title to the property back to us to satisfy the amount you owe.
Best used when: You cannot make any payment but want to avoid foreclosure and you have had your home listed for sale for at least 90 days. This option is reserved for the most extreme situations and is subject to investor approval.
Interest on the portion of your loan balance that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes. You should consult a tax advisor for further information regarding the deductibility of interest and charges.
All borrowers are subject to qualification, underwriting approval, lender terms and conditions. Terms, conditions, and rates are subject to change without notice.