Freddie Mac has issued guidance to its
lenders and servicers in an effort to keep the mortgage market flowing during
the lengthening government shutdown. The
second shutdown-related Single-Family Seller/Servicer Guide Bulletin issued on
Monday covers both temporary workarounds for origination processes hindered by
the impasse and restates help that is available to existing borrowers.
The bulletin allows lenders to deliver
mortgages to Freddie Mac even if the borrower is not receiving a paycheck
because of the shutdown. Such loans must
meet other Freddie Mac requirements and the borrower must expect that the
borrowers' paychecks will resume when the government reopens. The previous bulletin allowed mortgage
originators to forego employment verifications for federal employees where it
was not possible to obtain such verification.
The current bulletin restates the option
outlined last week that permits servicers to accept a recent tax return in lieu
of an IRS Transcript Request Form (4506-T) for a loan workout or modification
as long as IRS is unable to process the requests.
Servicers are also reminded that Freddie
Mac's mortgage relief policies are available to its borrowers affected by the
shutdown. Eligible homeowners, whether
public or private sector employees, can be granted forbearance from loan
payments for three to 12 months.
Servicers are not allowed to report these accommodations to the credit
Dave Lowman, Executive Vice
President, Single-Family Business at Freddie Mac said, "We're issuing this
guidance to help ensure the continued smooth operation of the mortgage market
during the temporary shutdown of the federal government. Today's 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 shutdown. We are
also reminding servicers of our forbearance options to assist qualified
homeowners with Freddie Mac mortgages to minimize the shutdown's impact on our
nation's families and communities."