Freddie Mac Issues Guidance on Borrowers Affected by Shutdown

In an effort to keep the mortgage market running as smoothly as possible, ""Freddie Mac"":http://www.freddiemac.com/ issued Monday temporary guidance for lenders to continue approving loans for eligible borrowers during the federal shutdown.

Dave Lowman, EVP of single-family business at the GSE, said the ""bulletin"":http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1319.pdf ""is intended to give lenders the certainty to continue approving and delivering new mortgages that meet Freddie Mac guidelines to eligible borrowers, such as federal employees and contractors, during the temporary shutdown.""

The new bulletin allows lenders to still deliver mortgages to Freddie Mac if the borrower is not receiving a paycheck as a result of the shutdown, as in the case of currently furloughed workers. The loan must meet Freddie Mac's other requirements, and there must be a reasonable expectation that the borrower will return to work when the government reopens.

The company also reminded servicers that its mortgage relief policies are still available to public and private sector employees affected by the shutdown, meaning servicers can provide eligible borrowers forbearance (ranging from up to three to 12 months) that must not be reported to credit bureaus.

In lieu of a tax transcript request, servicers can accept a borrower's most recent signed federal tax return for any information needed to evaluate eligibility for Freddie Mac's Home Affordable Modification Program, standard modifications, or other loan workout options.

The company announced it will ""continue to monitor the situation and may provide additional guidance or requirements"" should the shutdown go on for a prolonged period.