Fannie Mae announced its Wounded Warriors Forbearance Program:
At an event today at the Pentagon, Fannie Mae (FNMA/OTC) and the U.S. Army announced new initiatives to help service members who are struggling with their mortgage payments avoid foreclosure. The effort includes a mortgage payment forbearance of up to six months where the death or injury of a service member on active duty causes a hardship for impacted military families with a mortgage obligation.
One positive feature is that Fannie Mae will suspend credit reporting during the forbearance period:
Service members or surviving spouses who may be eligible for the special forbearance are to contact their mortgage company. The mortgage company may grant forbearance of up to six months under Fannie Mae's "Unique Hardships" guidelines with Fannie Mae's approval. Under forbearance, the mortgage company may reduce or suspend the borrower's monthly payments for the specified period. Credit bureau reporting will be suspended during the forbearance to minimize any derogatory impact.
It is important to note that the program is NOT sponsored by the Veterans Administration. The VA offers similar options for wounded service members through its partner lenders. The VA encourages wounded veterans or surviving spouses to contact the lender if they are unable to make payments as well as notify the regional VA lending center. While the lenders often offer forbearance agreements, they usually report the delinquencies to the credit bureaus.
Veterans facing financial difficulty might think these programs are complimentary when in fact, they are exclusive. The first step is to always contact the loan servicer (the company to whom you make payments). Always ask the loan servicer which entitiy "owns" the loan (investor or guarantor).
