PLANO (HousingWire.com) – Many jobless homeowners unable to make their monthly mortgage payments will soon get a little help from Fannie Mae and Freddie Mac.
The government-sponsored housing finance companies have announced plans to allow such borrowers to defer part or all of their mortgage payments for up to 12 months while they are out of work.
Fannie Mae will require mortgage servicers to install a new program providing forbearance relief to unemployed borrowers beginning March 1.
Servicers will be able to provide up to six months of relief without getting approval from the government-sponsored enterprise. Special consideration can be given to borrowers who require up to 12 months of forbearance.
Freddie Mac will begin offering 12-month forbearance plans on Feb. 1.
Delinquent borrowers and others on the verge of default are eligible for the program. Second homes and investment properties will not be considered.
Servicers must determine that a borrower has less than 12 months worth of mortgage payments in reserves and has monthly housing expenses above 31 percent of their income before extending a forbearance plan.
