Freddie Mac Issues Additional Shutdown Guidance

Freddie Mac seller/servicers can still close and deliver mortgages if the borrower is temporarily out of work or not receiving a paycheck because of the government shutdown, according to new guidance by the GSE.

This applies to government workers and private contractors that are affected by the government shutdown that is going on its second week.

The latest guidance from Freddie is “intended to give lenders the certainty to continue approving and delivering new mortgages” during the shutdown, a Freddie official said Monday evening.

The new guidance also instructs servicers to provide forbearance for three or 12 months for borrowers impacted by the shutdown. “This means servicers can provide eligible borrowers forbearance that must not be reported to credit bureaus,” the Oct. 7 Freddie bulletin says.

In terms of loan modifications and workouts, the bulletin explains that servicers can qualify troubled borrowers who provide their “most recent signed tax return” while the IRS is unable to process an IRS Transcript Request Form (4506-T).