Freddie Mac offers a break to unemployed homeowners

Unemployed homeowners will be allowed to suspend or reduce mortgage payments for as long as a year under a new policy announced by mortgage finance firm Freddie Mac on Friday. The new rules take effect on Feb. 1.

Freddie Mac will give mortgage servicers the authority to provide six months of forbearance to unemployed borrowers without prior approval, and the agency can approve an additional six months of forbearance after that. Homeowners are still responsible for paying off their full mortgage plus interest after the forbearance period ends.

According to a Freddie Mac news release, unemployed borrowers can now avoid foreclosure by asking their lender to lower their payments for up to one year. The latest statistics suggest nearly 10 percent of delinquencies on Freddie Mac mortgages were tied to unemployment.

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The Federal Housing Finance Agency (FHFA) called for the extension, in the hope it would keep more families in their homes. Freddie Mac previously allowed lenders to grant up to three months of forbearance with no payment, or six months at a reduced payment, without the firm's prior approval.

Longer forbearance times were restricted to events such as natural disasters, permanent disability or long-term medical emergencies, and still required prior approval.

"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," Tracy Mooney, Senior Vice President of Single-Family Servicing and REO at Freddie Mac, wrote in a news release. "We believe this will put more families back on track to successful long-term homeownership."

Delinquent borrowers with Freddie Mac owned- or guaranteed-mortgages who are in an existing short-term forbearance plan can be evaluated for an extension under the new policy.

Borrowers interested in learning more about the forbearance program should contact their mortgage servicer. A list of phone numbers can be found at BankRate.com.

If you are unemployed and need financial help, contact your lender or the Homeowner's HOPE Hotline, 888-995-HOPE.

[Willgopher]

My mortgage lender wouldn't provide forebearance without applying for a modification, which I wouldn't qualify for b/c I was unemployed, LOL.
An affordable house with an affordable payment, just a problem of reduced income. Probably too late for me now that I've had to declare bankruptcy...

[gregkinard]

One reason existing refinancing efforts have fallen far short of their goals is that Fannie and Freddie continue to charge homeowners high, risk-based fees up front to refinance their loans you can avoid this if you check your rates and fees at 123 Refinance before you sign

[rightbehind]

Your spreading pure spew.

[maiingan]

This all is obviously just to help the banks. It's possible for a person to be a homeowner with the mortgage paid off, and in an unemployed situation not able to make all the home-related bills. These people get no help and no government concern. Decent-paying jobs should be the first remedy, but having a mortgage shouldn't put anyone in front of unemployed people with no mortgages, or who are renters.

[credibility2]

The president is buying votes with this offensive accommodation. Those of us, such as myself, who are out of work, but don't qualify for unemployment and paying the mortgage on time are getting the royal shaft from this socialist administration. We're the suckers. I haven't any sympathy for those who aren't paying their mortgage regardless of the circumstances.

[rightbehind]

If you are out of work and didn't qualify for unemployment you were a business owner that didn't pay into unemployment, fired for just cause, or quit your last job.

If you collect unemployment it's because of socialism. Most people don't recognise socialism and communism when it shows up in their mailboxes. State property taxes are communism. So long as the state can charge you property taxes you will never own your property. Socialism would be like your water bill if the county provides your water. A resource being used for the good of all.

[Archie_Clements]

How much will this cost and who will pay for it?

[rightbehind]

Nothing and only the home owners are responsible for their mortgages. The republican economic terrorist are probably ready for jihad.

[razerfish]

Election year nonsense that simply kicks the can down the road. This attempt to prop up the housing market will end up as yet another failure.

[rightbehind]

Just like the big 3 automakers?? BTW We are buying another new GM within the next 5 months for the kids graduation present.