Tag Archives: Forbearance

Freddie Mac has announced an extension of forbearance for unemployed borrowers of up to 12 months. According to Freddie Mac, almost 10 percent of delinquencies in the GSE's portfolio are linked to unemployment. Under the new directive, servicers may offer up to six months of forbearance to unemployed homeowners without prior approval, and with prior approval they may offer up to six months more, totaling a possible one year in some cases.

Servicers for Fannie Mae and Freddie Mac have completed almost 2 million foreclosure prevention actions for the two companies since they went into conservatorship in 2008, according to the Federal Housing Finance Agency's (FHFA) third-quarter report released Wednesday. More than half of these actions have been loan modifications, and of the remainder, about 676,500 have kept homeowners in their homes. About 269,700 were short sales or deeds-in-lieu of foreclosure.

For the first time in over a year neither Fannie Mae nor Freddie Mac are showing any downward movement in their seriously delinquent mortgage rates. Fannie's percentage of single-family loans at least three payments past due remained unchanged between the months of June and July at 4.08 percent. Freddie's increased one basis point to 3.51 percent. The Federal Housing Finance Agency says foreclosure prevention actions completed on loans held by the two mortgage financiers have declined for four consecutive quarters.

Fannie Mae's second-quarter loss narrowed from the previous quarter, but still in the red, the GSE says it needs to draw another $5 billion from Treasury, bringing its tally of taxpayer-funded support to $104.8 billion since the company was placed into conservatorship. The company reported a net loss of $2.9 billion for the April-to-June period, compared to a net loss of $6.5 billion in the first quarter of the year. Fannie Mae acquired 53,697 REO homes through foreclosure over the three months ending in June.

The national unemployment rate edged up in June to 9.2 percent, as the economy added just 18,000 jobs. The numbers were worse than market forecasts. Economists were expecting the rate to remain unchanged at 9.1 percent and job gains to be between 85,000 and 100,000. Declines in the labor market have added significantly to the volume of seriously delinquent mortgages. On Thursday, the administration announced that it was extending the mortgage forbearance period to 12 months for unemployed homeowners in government programs.

With no sustained pickup in the job market, over six million Americans have been unemployed for longer than 27 weeks. Such extended periods of joblessness remain the predominant force behind high volumes of seriously past-due mortgages. With these realities weighing on an already fragile market, the federal government said Thursday it will extend the mortgage forbearance period for unemployed homeowners to a year under the Federal Housing Administration and Making Home Affordable programs.

Freddie Mac borrowers whose homes were damaged or destroyed by the recent storms in the Midwest can now take advantage of the GSE's full menu of relief policies. Homeowners residing in counties declared major disaster areas by President Obama are eligible for assistance. Freddie Mac's disaster relief policies allow servicers the discretion to reduce or suspend mortgage payments for up to 12 months.

The U.S. Treasury released updated guidance for the Home Affordable Modification Program (HAMP) this week requiring certain servicers to provide borrowers with a single point-of-contact through the entire default resolution process. The new directive applies only to the largest servicers, however Treasury says all servicers participating in HAMP are encouraged to adopt the new guidance. The rule also carries over to the government's short sale and unemployment programs.

Freddie Mac said Monday that its full menu of relief policies for borrowers affected by disaster is being extended to homeowners whose homes were damaged or destroyed by the recent storms in the South and are located in counties that the president has declared to be major disaster areas. The GSE says it has instructed its servicers to work with borrowers with Freddie Mac-owned mortgages affected by these storms to grant forbearance on their mortgage payments for up to one year.