Mortgage Payment Relief May be Available on Fannie Mae and Freddie Mac Loans

By
Real Estate Agent with Remax Estate Properties - BRE #01368971 DRE #01368971

Mortgage Payment Relief May be Available on Fannie Mae and Freddie Mac Loans. Huge news for people who are temporarily unemployed. Fannie and Freddie will begin implementing "forbearance" programs beginning March 1st and Feb.1st (respectively).

The following information was published in the LA TIMES by Kenneth R. Harney  http://www.latimes.com/  January 22, 2012

On loans they own or have securitized, Fannie and Freddie are now directing servicers to forbear when a borrower can show a job loss.

Unlike the companies' earlier rules, servicers can grant half a year of reduced or suspended payments without getting permission in advance.

If unemployment continues beyond six months, and if the servicer believes additional forbearance for up to another six months would be appropriate, it can ask Fannie or Freddie for approval to do so.

During any unemployment forbearance period under the rule revision, borrowers will not be subject to foreclosure, even if they had fallen behind on payments before the forbearance began.

Fannie Mae's policy becomes mandatory for all loan servicers March 1. Freddie Mac's policy takes effect Feb. 1.

Though no estimates were available on how many borrowers could be assisted under the new guidelines, the numbers are likely to be substantial at a time when the national unemployment rate is at 8.5%.

Forbearance, it should be noted, does not mean a forgiveness or reduction of the principal balance on the mortgage.

Whatever amounts go uncollected during the forbearance period must eventually be repaid. Typically missed payments are "put at the back of the loan" or repaid in increments over the up coming payments.

Not everybody owning a home with a Fannie or Freddie mortgage will be eligible for the expanded job-loss relief.

The house must be a principal residence, not a second home or investment property.

Fannie's guidance to servicers specifically rules out assistance when the home was financed with an FHA, VA or Rural Housing mortgage.

Most important, there must be a documented "financial hardship"caused by the employment loss, and there must be a reasonable chance that without forbearance the borrowers could sink into default and eventually lose the house.

In cases in which borrowers are being considered for an extension of an existing forbearance plan, borrowers will also have to document that they don't have cash reserves - bank accounts or other liquid assets -that exceed 12 months' worth of their monthly housing expenses

 

To determine if Fannie Mae owns your loan just click here.

 

To determine if Freddie Mac owns your loan just click here.

 

 

 

 

 

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Show All Comments
Rainer
168,341
Richard Burge
Coldwell Banker Sloane Realty - Sunset Beach, NC
ABR - Property Manager - Notary

great news for people that have loss their jobs...I will pass this on.

Jan 24, 2012 03:10 PM #1
Rainmaker
686,549
Kay Van Kampen
RE/MAX Broker, RE/MAX Solutions - Springfield, MO
RealtorĀ®, Springfield Mo Real Estate

I'm working with several clients on loan modifications from fannie mae and freddie mac right now.  I'm waiting to see how long it takes to get them approved.  Both clients lost their jobs, but now have new ones.

Jan 25, 2012 08:10 AM #2
Rainmaker
749,169
Maureen Megowan
Remax Estate Properties - BRE #01368971 - Palos Verdes Estates, CA
Palos Verdes Real Estate Blog

Good luck Kay

Jan 27, 2012 10:30 PM #3
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Rainmaker
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Maureen Megowan

Palos Verdes Real Estate Blog
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