HomeSaver Payment Forberance Program from Fannie Mae Explained

Can some explain the Fannie Mae HomeSaver Payment Forberance Program?

1 Answer

**HomeSaver Advantage Forbearance **is Fannie Mae’s trademarked name for one possible foreclosure avoidance plan that can be initiated by loan servicers (the folks to whom you pay your mortgage currently) on loans that were written under Fannie Mae guidelines. If you are unsure as to whether you have a “Fannie Mae” loan, your servicer can generally determine this for you, or you can look here:  http://loanlookup.fanniemae.com/loanlookup/ Nowadays, servicers may be instructed to pursue a more permanent modification of the struggling homeowner's loan first under the Making Home Affordable plans hashed out in 2009, ( www.makinghomeaffordable.gov), but may still offer the forebearance plan, especially if your payment hardship is temporary and there are better times on the horizon.

In the case of a Fannie Mae forbearance, the servicer works with you as the borrower to determine the cause  and potential timeline of your hardship, and what amount you can afford to pay monthly (though not less than 50% of what would be normally due under the terms of your note). They may require paystubs, bank statements, or other proof of income and assets to make this determination. As a general benchmark, the lender wants you to pay no more than 31% of your pretax income for your housing payment, though this can vary greatly depending upon your individual circumstances.

If approved, each month (generally for 6 months), the servicer agrees to accept the reduced amount on your account, while adding the balance of what is due to the principle amount that you owe (so that it will be paid later, at the end of the loan term).  After 6 months, your account will be reevaluated to see if it may be returned to normal status. Fannie Mae encourages this solution instead of immediately initiating foreclosure proceedings, and pays the servicer $200 when the servicer reports successful implementation of the Homesaver technique.

More detailed information can be found on Fannie Mae’s website for loan sellers and servicers: https://www.efanniemae.com/sf/servicing/hsf/