WASHINGTON (6/6/14)--Fannie Mae has updated the requirements for its Unemployment Forbearance program, which allows borrowers to have their payments temporarily reduced or suspended in the event they become unemployed. The updated rules allow loan servicers to approve the use of the program without Fannie Mae's approval.
A borrower can be approved for the Fannie Mae Unemployment Forbearance Program by the loan servicer if:
- The borrower's mortgage payment is in imminent default or the mortgage loan delinquency is less than or equal to 12 months as of the evaluation date; and
- All other applicable Unemployment Forbearance eligibility requirements from the Fannie Mae servicing guide are met.
The initial forbearance period is the lesser of six months or upon notification from the borrower of re-employment.
Loan servicers may not offer forbearance for more than six consecutive months while the mortgage remains in their mortgage-backed securities pool. After the sixth consecutive month, it must be removed from the pool.
In its official announcement, Fannie Mae encourages mortgage servicers to implement the revised policy immediately, but it must be implemented no later than Sept. 1.