If 27 Democrats in the House of Representatives get their way, unemployed Fannie Mae and Freddie Mac borrowers will receive the same year-long forbearance period on their mortgages that FHA borrowers receive[1]. The group has written a letter to the president urging him to make the change in order to “help those with job losses save their homes while they seek employment.” Currently, GSEs have a three-to-four month forbearance period in place, while the FHA offers a year’s grace and some borrowers also qualify through Home Affordable Modification Program (HAMP) loan modifications. Lawmakers believe that ongoing levels of high unemployment warrant this forbearance. In July, unemployment was 9.2 percent[2]. Today it slipped down 0.1 percent to 9.1[3].

The two GSEs currently guarantee approximately half of all existing mortgages, which would mean that many, many more homeowners would qualify for forbearance if this change were implemented. Do you think that a year’s worth of forbearance on these mortgages would ultimately be a good thing? Would it help or hurt the housing recovery?

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[1] http://realtormag.realtor.org/daily-news/2011/08/04/lawmakers-extend-unemployment-aid-for-gses

[2] http://www.housingwire.com/2011/08/03/lawmakers-push-for-year-long-forbearance-on-gse-mortgages

[3] http://www.dsnews.com/articles/unemployment-rate-slips-to-91-2011-08-05