GSEs Offer Relief On Military Loans

Fannie Mae and Freddie Mac said last week that they have initiated steps to ease the forbearance process for borrowers called to active military duty.

The two secondary mortgage giants said they will require of all their seller/servicers that they merely accept a borrower's active military orders in order to activate the 6% cap on all mortgage loans and will ask that lenders not notify credit bureaus of forbearance requests so that the borrower's credit ratings are not adversely affected.

"Our goal is that no one should lose their home, or worry about losing their home, or worry about their credit report simply for serving in the U.S. military," said Freddie Mac chairman and chief executive Leland Brendsel at a news conference.

Under the Soldiers' and Sailors' Civil Relief Act, all lenders are required to reduce interest rates on loans to active duty military personnel to 6% and to forgive all interest above that amount during their time of active duty.

The Fannie and Freddie initiative will make it easier for military personnel to apply for that forbearance.

Copyright 2003 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.mortgageservicingnews.com

Next in News ►