Fannie Mae and Freddie Mac have recently revised their loan forbearance policies in order to help unemployed or soon-to-be unemployed borrowers from losing their homes. A home cannot go into foreclosure under the newly revised forbearance rules.
What the forbearance law does to help the unemployed is that it basically puts a borrowers mortgage payment on hold. Obviously being unemployed can temporarily hinder ones ability to make payments and therefore is why this new policy was put into play. Due to companies downsizing and job instability the policy will give a borrower a fair amount of time to find a job and get their income back on track.
The policy isn't available to everyone under a Fannie / Freddie mortgage. One must meet certain requirements in order to receive the loan forbearance. One of the requirements is that the borrowers monthly housing expenses must be more than 31% of their monthly gross income. Borrowers also must document that they don't have cash reserves that could be paying for their mortgage.
The loan will eventually need to be paid back. The new policy is by no means a freebie but will definitely help several people that just need time in order to fulfill their mortgage payments. Call a Fannie or Freddie servicer today to see if you qualify for a forbearance plan.
Find out more about Fannie and Freddies new Forbearance policy.