Mortgages Blog

Finance Blogs » Mortgages Blog » Forbearance for the jobless

Forbearance for the jobless

By Polyana da Costa ·
Tuesday, January 10, 2012
Posted: 12 pm ET

Homeowners who are unemployed and struggling to pay their mortgages may get a break on their mortgage payments for up to a year, says mortgage finance firm Freddie Mac.

Freddie currently allows mortgage servicers to give borrowers three to six months to get back on their feet when they are out of work. Starting Feb. 1, servicers can give borrowers a break of up to six months without written approval from Freddie, and up to a year with Freddie's approval.

In order to qualify, the loan must be owned by Freddie Mac. Fannie Mae says it plans to implement similar changes but has not made an announcement yet.

To find out if your loan is owned by one of the entities, you can visit Freddie Mac's Loan Lookup page on its website.

Borrowers who already are on short-term forbearance may be granted an extension after Feb. 1.

"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," says Tracy Mooney, a senior vice president at Freddie Mac. "We believe this will put more families back on track to successful long-term homeownership."

Borrowers with loans insured by the Federal Housing Administration, or FHA mortgages, also are eligible for forbearance of up to a year. The Department of Housing and Urban Development announced the extended forbearance period last year.

Follow me on Twitter @Polyanad

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
1 Comment