WASHINGTON, D.C. – October 3, 2013 – (RealEstateRama) — The Homeownership Preservation Foundation (HPF), an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure through its Homeowner’s HOPE™ Hotline at 888-995-HOPE™, today 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,” Ms. 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.”
HPF’s counselors are available 24 hours a day, 7 days a week at 888-995-HOPE to answer questions about Unemployment Forbearances and to help impacted federal workers manage financial concerns resulting from their furloughs, including reduced-income budgeting and general debt counseling. There is no charge for the call or for the service that HPF provides.
About the Homeownership Preservation Foundation
The Homeownership Preservation Foundation (HPF) is an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure. HPF guides consumers onto the path of sustainable homeownership and develops innovative solutions to preserve and expand homeownership. Through its Homeowner’s HOPE™ Hotline, 888-995-HOPE™, HPF provides comprehensive financial education and confidential foreclosure prevention counseling for FREE, 24 hours a day, 7 days a week, 365 days a year, in over 170 languages. Since 2007, HPF has served more than five million distressed homeowners, an average of 5,500 each weekday, who depend upon HPF as a trusted, neutral source of information and assistance. For more information about the Homeownership Preservation Foundation or the Homeowner’s HOPE™ Hotline, please visit www.995hope.org