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Freddie Mac's Shutdown Workaround for Furloughed Workers

by devteam October 8th, 2013 | Share

Freddie Mac has issued guidance to itsrnlenders and servicers in an effort to keep the mortgage market flowing duringrnthe lengthening government shutdown.  Thernsecond shutdown-related Single-Family Seller/Servicer Guide Bulletin issued onrnMonday covers both temporary workarounds for origination processes hindered byrnthe impasse and restates help that is available to existing borrowers.  </p

The bulletin allows lenders to deliverrnmortgages to Freddie Mac even if the borrower is not receiving a paycheck</bbecause of the shutdown.  Such loans mustrnmeet other Freddie Mac requirements and the borrower must expect that thernborrowers' paychecks will resume when the government reopens.  The previous bulletin allowed mortgagernoriginators to forego employment verifications for federal employees where itrnwas not possible to obtain such verification.  </p

The current bulletin restates the optionrnoutlined last week that permits servicers to accept a recent tax return in lieurnof an IRS Transcript Request Form (4506-T) for a loan workout or modificationrnas long as IRS is unable to process the requests. </p

Servicers are also reminded that FreddiernMac’s mortgage relief policies are available to its borrowers affected by thernshutdown.  Eligible homeowners, whetherrnpublic or private sector employees, can be granted forbearance from loanrnpayments for from three to 12 months. rnServicers are not allowed to report these accommodations to the creditrnbureaus. </p

Dave Lowman, Executive VicernPresident, Single-Family Business at Freddie Mac said, “We’re issuing thisrnguidance to help ensure the continued smooth operation of the mortgage marketrnduring the temporary shutdown of the federal government. Today’s bulletinrnis intended to give lenders the certainty to continue approving and deliveringrnnew mortgages that meet Freddie Mac guidelines to eligible borrowers, such asrnfederal employees and contractors, during the temporary shutdown. We arernalso reminding servicers of our forbearance options to assist qualifiedrnhomeowners with Freddie Mac mortgages to minimize the shutdown’s impact on ourrnnation’s families and communities.”

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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