Freddie Mac to give Unemployed Homeowners a Break

Homeowners who lose their jobs will be able to skip payments on loans backed by Freddie Mac for up to a full year under a new policy taking effect Feb. 1 at the mortgage finance giant. The change, doubling the forbearance extended to the unemployed, squares Freddie Mac's policies with those that its sister company, Fannie Mae, adopted in September 2010. The two firms, operating under government conservatorship since nearly melting down three years ago, own or guarantee more than half of all U.S. mortgages. The other pillar propping up the mortgage market, the Federal Housing Administration, also began providing a full year's forbearance as of last summer on the low-down-payment loans that it backs. Freddie Mac previously had allowed banks providing customer service on its loans to extend three months of forbearance themselves when borrowers lost jobs, with another three months possible with approval from Freddie, for a total of six months. Starting Feb. 1, servicers can now unilaterally allow borrowers to skip payments for six months, and add on another six months with Freddie's approval. The missed payments would be added on the loan balance unless the borrowers separately obtain a loan modification waiving that measure.

@ Chicago Tribune | Posted: 01/09/12 at 0326 EST