Freddie Mac to grant breaks on mortgage payments for up to a year

[The Straight Story]

Freddie Mac to grant breaks on mortgage payments for up to a year

3:39 p.m. CST, January 6, 2012
Freddie Mac announced Friday that it was giving mortgage servicers the authority to offer up to 1 year of mortgage forbearance to unemployed homeowners who have Freddie Mac-backed mortgages.

The change, with takes effect Feb. 1, means loan servicers can offer six months of forbearance to jobless borrowers without Freddie's approval and another six months with approval. Currently, servicers can grant up to three months of no mortgage payments without prior agency approval, or six months of reduced payments with approval .

Fannie Mae is expected next week to announce guidelines that will align with the new ones at Freddie Mac. The expansions are the result of a directive from the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

According to the most recent report from the Office of the Comptroller of the Currency, the percentage of Fannie Mae- and Freddie Mac-based loans that were seriously delinquent increased to 2.5 percent at the end of September, from 2.3 percent in June.

http://www.chicagotribune.com/business/breaking/chi-freddie-mac-to-grant-breaks-on-mortgage-payments-for-up-to-a-year-20120106,0,1820405.story

[dipsydoodle]

1. Does that roll up the capital amount?

.

[SoCalDem]

5. It probably just piles up on the other end of the loan

Until they are forced to write-DOWN the principle to reflect the actual current values, it's all a box of bandaids

[cthulu2016]

7. There is a real macro value to stretching out foreclosures over a longer period

I don't know if this will help folks much long-term but it helps them short-term (at least they perceive it as such or wouldn't seek the extensions) and helps the housing market in general.

Folks who avail themselves of this may be wrong to do so, but it cannot be malign to have the option.

[SoCalDem]

8. If it helps them stave off foreslosure, that's great, but in the long run, they still owe it

Banks still need to be forced to write down loans..

[demosincebirth]

2. I wonder if Obama had anything to do with this?

[whistler162]

3. Of course not.... Obama bad!

[banned from Kos]

4. LOL! Obama is criminal bankster - say the dope smokers at Rolling Stone!

He wants to take their breadsticks away!

[xiamiam]

6. unlikely..nt