Freddie Mac Being More Lenient to Unemployed Borrowers, Providing Up to 12 Months Forbearance

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Here is some good news for U.S. homeowners with a Freddie Mac loan who are currently unemployed.

Today Freddie Mac announced it is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed borrowers without Freddie Mac's prior approval and up to an additional six months with prior approval. 

This means unemployed borrowers may be eligible for up to 12 months of forbearance.  Freddie Mac's forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect on February 1, 2012.

Freddie Mac FAQs:

• Mortgage servicers can now approve unemployed borrowers with Freddie Mac owned- or guaranteed-loans for six months of forbearance without prior approval from Freddie Mac.

• Servicers can extend the forbearance period up to an additional six months with prior Freddie Mac approval, giving eligible unemployed borrowers with Freddie Mac owned- or guaranteed-mortgages up to one year of forbearance.

• The expanded forbearance options will take effect on February 1, 2012.

• Delinquent borrowers in an existing short term forbearance plan can be evaluated for an extended forbearance under the new policy.

• Previously Freddie Mac allowed servicers to grant up to three months of forbearance with no payment and without prior approval, or six months at a reduced payment with prior approval.  Longer forbearance required prior approval and was generally restricted to events such as natural disasters, permanent disability or long-term medical emergencies.

• According to the latest statistics, nearly 10 percent of delinquencies on Freddie Mac mortgages

Freddie Mac's  Senior Vice President of Single-Family Servicing and REO Tracy Mooney tells World Property Channel, "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.  We believe this will put more families back on track to successful long-term homeownership."