Freddie Mac is providing up to one year of forbearance for unemployed borrowers to pay their mortgage.
As part of the new deal, mortgage servicers can now approve unemployed borrowers with Freddie Mac owned- or guaranteed loans for six months of forbearance without prior approval from the government-sponsored enterprise. Freddie can then extend the forbearance for an additional six months.
Under the old directive, servicers were allowed to grant up to three months of forbearance with no payment on Freddie loans without prior approval, or up to six months of forbearance with reduced payments with the GSEs' approval.
Any longer forbearance was generally restricted to events such as natural disasters, permanent disability or long-term medical emergencies.
These new forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect at the beginning of February.
Freddie said nearly 10% of its delinquent loans are attributed to unemployment.
“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 of single-family servicing and REO at Freddie Mac. “We believe this will put more families back on track to successful long-term homeownership,” Mooney said.
