Freddie Mac and Fannie Mae announce mortgage forbearance extension
In another move geared to moving the housing market recovery along, the two major mortgage players, Freddie Mac and Fannie Mae, last week announced expanded relief programs for homeowners struggling with their loans due to joblessness. The thought that relieving some of the stress from the combination of joblessness and mortgage obligations will make it easier for distressed and out-of-work homeowners to focus on finding a new job and getting back on track with their home loan.
Freddie Mac and Fannie Mae Forbearance for Jobless now 12 Months
Freddie Mac and Fannie Mae now allow mortgage companies to grant unemployed borrowers payment suspension or reduction for up to 12 months. Previously, the maximum length for mortgage forbearance on Freddie Mac guaranteed loans was six months, with written approval from Freddie Mac.
FHA Forbearance was extended to 12 months last July
The Federal Housing Authority (FHA) made a similar move six months ago, in July 2011, when it mandated that mortgage companies offer 12 months of forbearance to qualified unemployed borrowers — up from a prior maximum of four months.
Nearly 60% of Outstanding Mortgages Backed by Fannie, Freddie and the FHA
The announcement from Freddie and Fannie impacts far more homeowners than did the FHA’s announcement last July — Freddie and Fannie together guarantee nearly half of all U.S. home loans, while the FHA backs less than 10 percent.
For more, read these articles:
- Unemployed Mortgage Holders Get Extension on Payments (The New York Times)
- Mortgage Aid for Unemployed Expanded (Wall Street Journal Developments)
- Fannie Mae unveils new forbearance program for unemployed and Freddie extends mortgage forbearance for unemployed (Housing Wire)