Good news for unemployed homeowners at last, as Fannie Mae says it will provide additional aid to those who are out of work and struggling to pay their mortgages, by extending the forbearance period by up to as much as 12 months.
Beginning on March 1 this year, Fannie Mae stated in a press release that it will order lenders to provide a six month extension to the forbearance relief period to those borrowers who cannot pay their mortgages, without the need for any official approval. Further, Fannie Mae have said that some borrowers may be entitled to “special consideration”, which could see mortgage payments suspended or reduced for up to 12 months.
The announcement from Fannie Mae follows a similar one made by Freddie Mac earlier this week. Freddie stated that starting from February 1st this year, all qualified unemployed borrowers will be granted a 12-month forbearance period.
In order to qualify for the forbearance, mortgage servicers stated that borrowers will need to have less than 12 months of mortgage payments in reserve, together with housing expenses greater than 31% of their income. Any borrower who meets those conditions will be automatically entitled to an extension of their forbearance plan.
Over 7,000 forbearance plans were issued by the GCEs during the third quarter of 2011, according to statistics from the Federal Housing Agency.
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