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HPF Provides Guidance for Government Employees Impacted by Shutdown

NationalMortgageProfessional.com
Oct 04, 2013

The Homeownership Preservation Foundation (HPF) has issued guidance to federal employees anticipating difficulties meeting their monthly mortgage obligations due to a government shutdown-related loss of income. “The most beneficial step a federal worker or contractor can do right now if he or she is anxious about their ability to stay current with their mortgage payments during a prolonged government shutdown is to reach out early and get the help you need,” said Colleen Hernandez, CEO of the Homeownership Preservation Foundation. “Many homeowners may be eligible for an Unemployment Forbearance, which will provide financial relief through reduced or limited payments during this stressful time. HPF’s housing counselors are available around the clock to help impacted homeowners understand the eligibility requirements and walk them through the process or they can call their loan servicer directly to inquire.” An Unemployment Forbearance is an agreement made between a mortgage borrower and his or her loan servicer that temporarily reduces or suspends monthly mortgage payments while the homeowner seeks to restore their lost income. At the end of the forbearance period, the borrower agrees to a restoration of normal payments and a plan to repay the amount that was not paid during the forbearance period, such as through a single lump-sum payment, adding payments at the end of the initial loan period, or increasing the amount of monthly payments until restitution is made. Fannie Mae, the leading source of residential mortgage credit in the U.S. secondary market, issued a directive to lenders this week that addressed how to help furloughed mortgage borrowers that may experience financial hardship during the government shutdown. “Fannie Mae's directive provides much-needed clarity and relief to federal workers during this challenging, atypical time in Washington, and we heartily applaud its servicing guidelines,” Hernandez added. “In addition to endorsing Unemployment Forbearance as a reasonable response for impacted borrowers in distress, it also directed that servicers must suspend related credit bureau reporting for borrowers that receive one and that late payment charges be waived as well under certain circumstances. These directives will no doubt bring some peace of mind to federal workers who are already feeling the stress and strain from the uncertainties of their furloughs.”
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