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Home | News | Foreclosure | Fannie Mae Extends Mortgage Relief for Unemployed Borrowers
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Fannie Mae Extends Mortgage Relief for Unemployed Borrowers

""Fannie Mae"":http://www.fanniemae.com issued new guidelines to its servicers Wednesday, introducing an unemployment forbearance program which provides servicers the flexibility to assist borrowers who have a financial hardship due to job loss, including those facing imminent default.

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With unemployment forbearance, the servicer reduces or suspends monthly payments for a specified period for a borrower who is unemployed.

With ""the new guidelines"":https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/svc1201.pdf, the servicer can approve an unemployment forbearance term of six months without

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obtaining Fannie Mae’s approval, provided that all borrower eligibility requirements are met.

If during the final month of the initial unemployment forbearance period, the borrower remains unemployed, the servicer must determine if the borrower is eligible for an extension no more than six additional months.

Forbearance extensions may be recommended on a case-by-case basis and must be submitted to Fannie Mae for review and a final decision.

The new directive from Fannie Mae mirrors the unemployed forbearance guidelines issued by ""Freddie Mac last week"":http://www.dsnews.com/articles/freddie-mac-extends-forbearance-for-unemployed-homeowners-2012-01-06.

Fannie Mae says the program “simplifies and streamlines the use of forbearance options” for the GSE’s servicers.

The new guidelines prohibit the servicer from proceeding with foreclosure during the forbearance period.

Servicers are required to implement Fannie Mae’s unemployment forbearance policies and procedures no later than March 1, 2012, for borrowers who become eligible for such assistance on or after that date. However, the D.C.-based GSE is encouraging all servicers to adapt their processes to the program guidelines immediately.

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About Author: Carrie Bay

Carrie Bay
Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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