Forbearance Terms Eased for Freddie's Borrowers

Freddie Mac gave unemployed homeowners whornare struggling to pay mortgages owned or guaranteed by the company a break onrnFriday when it eased its temporary forbearance restrictions.  Effective February 1, Freddie Mac servicers willrnno longer need prior approval from the government sponsored enterprise (GSE) beforernextending forbearance of up to six month’s duration to its borrowers who havernlost their jobs.  Servicers can also seekrnpreapproval for a second six month period of forbearance for those borrowers ifrnneeded.    </p

According to PRNewswire, thernauthorization to servicers came at the direction of the Federal Housing FinancernAgency (FHFA) which acts as conservator for both Freddie Mac and Fannie Mae sornit is reasonable to expect a similar announcement from the other GSE, perhapsrntoday.  The same source said that latestrnstatistics tie almost 10 percent of Freddie Mac’s delinquencies tornunemployment.</p

Prior to this announcement Freddie Macrnhad permitted its servicers to authorize non-payment forbearance for threernmonths without preapproval or for six months at a reduced payment with  prior approval.  Anything longer term required prior approvalrnand was generally restricted to events such as natural disasters, permanentrndisability, or long-term medical emergencies. rn</p

According to information released byrnFreddie Mac, delinquent borrowers who are already in a short-term forbearancernplan can be evaluated for an extended plan under the new policy.</p

Tracy Mooney, Senior Vice President,rnSingle-Family Servicing and REO, Freddie Mac said, “These expandedrnforbearance periods will provide families facing prolonged periods ofrnunemployment with a greater measure of security by giving them more time tornfind new employment and resolve their delinquencies.  We believe this willrnput more families back on track to successful long-term homeownership.”

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