Fannie Mae and Freddie Mac announced new programs targeted to home owners who have lost their jobs. The programs, called Forbearance, allow the suspension, and in some cases reduction, of payments for unemployed homeowners. Loan servicers have authority to include homeowners who have been unemployed for up to six months. After that there is an extension program available for an additional 6 months but the extension program requires Fannie or Freddie to approve the extension. The suspension period ends once the homeowner becomes employed or at the end of the 6 or 12 month period. The homeowner will then have to make payment arrangements to pay back the suspended payments as well as their current payments.
The Freddie Mac program begins February 1st and the Fannie Mae program must be implemented by the servicers no later than March 1st. Both programs allow homeowners to begin their application processes prior to the program date but decisions about eligibility won’t normally be made until the effective date.
These programs are only for borrowers who have loans with Freddie Mac and Fannie Mae. There are multiple servicers who work on these types of loans. For example you might make your monthly payments to Bank of America but your loan is actually owned by Fannie Mae. If you aren’t sure if Fannie Mae or Freddie Mac owns your loan there are on-line sites available to check. I also have resources to check for you. I have copies of the bulletins that provide more information for both programs. Just drop me an email and I can check your loan and/or forward you a copy of the bulletin.