New Help for Unemployed Homeowners

January 08, 2012

Some out-of-work homeowners are about to get a break from paying their mortgage payments.

According to Freddie Mac, nearly 10 percent of delinquencies on Freddie Mac mortgages are tied to unemployment.

As a result, the government-backed mortgage giant has announced that it is giving mortgage servicers the authority to offer unemployed borrowers a break from their mortgage payments for up to a year.

Under the new rules, which will take effect on February 1, 2012, mortgage servicers can now provide six months of forbearance without approval for unemployed homeowners with mortgages backed by Freddie Mac.

Those servicers can also extend the forbearance period up to another six months with Freddie Mac approval.

“These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies,” said Tracy Mooney, Senior Vice President, Single-Family Servicing and REO, Freddie Mac.

“We believe this will put more families back on track to successful long-term homeownership.”

Previously, Freddie Mac had allowed up to three months of forbearance with no payments or six months at a reduced payment. Longer forbearance was approved mostly only on natural disasters, permanent disability or long-term medical emergencies.

The country’s other government-controlled mortgage giant, Fannie Mae, is expected to announce new and similar guidelines this week for unemployed homeowners with Fannie Mae-backed loans.

Categories: Economy, Featured, Mortgages

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