WASHINGTON – The Federal Deposit Insurance Corp. has issued a new call to certain of its financial institutions to provide additional forbearance, or temporary respites to certain borrowers from mortgage payments.
The FDIC request has been made to the 53 banks that relied on the FDIC’s insurance fund when acquiring failed banks.
The FDIC has suggested such relief for borrowers should be considered for periods of up to six months, and in certain cases even longer. The goal, said FDIC, is to find more ways to work out mortgage-related issues and prevent additional foreclosures.
FDIC called for its insured banks to reduce loan payments to what it called “affordable levels” in cases where mortgage payment defaults have been caused by job loss or salary reduction. A reworked payment plan, said FDIC, should allow the homeowner to also be able to cover “reasonable living expenses.”
Several large banks already have different programs in place that offer various forms of forbearance.
