With the continued government shutdown, Freddie Mac has issued intermediate guidelines to lending institutions for approving home loans and modifications to keep the housing market from grinding to a halt.
Federal employees and contractors are not receiving paychecks during the government shutdown, but Freddie Mac is allowing lenders to approve mortgages for those borrowers â€” even in the absence of steady income â€” assuming they meet other loan requirements and plan to return to work once the government reopens. Â
This bulletin is intended to give lenders the certainty to continue approving and delivering new mortgages that meet Freddie Mac guidelines to eligible borrowers, such as federal employees and contractors, during the temporary government shutdown. Dave Lowman, Freddie Mac executive vice president of single-family business stated that "We are also reminding servicers of our forbearance options to assist qualified home owners with Freddie Mac mortgages to minimize the shutdownâ€™s impact on our nationâ€™s families and communities."
Freddie Mac has mortgage relief and forbearance policies available to public- and private-sector employees who are affected by the governmentâ€™s shutdown. One of the biggest hurdles for lenders is being unable to verify borrowersâ€™ income directly from the IRS during the government freeze. But both Fannie Mae and Freddie Mac have said they would adjust policies as needed so that loans and modifications could continue to be approved.Â
Source: â€œFreddie Mac guides lenders through
government freeze,â€ HousingWire (Oct. 7, 2013)
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