The Federal Deposit Insurance Corporation (FDIC) encouraged its loss-share partner institutions to consider temporary mortgage payment reductions for unemployed borrowers, according to a release. The urging is part of the FDIC’s loss-share agreement with acquirers of failed FDIC-insured institutions. The program will give borrowers an opportunity to find new employment and avoid foreclosure through forbearance agreements. “Servicers may provide the borrower with at least six months of payment relief,” a spokesperson for the FDIC told HousingWire. “The term forbearance may vary based on the borrower’s circumstance.” The program reaches out to both the unemployed and the underemployed, any borrower given a reduction in household income due to decreased hours, loss of job, or a qualifying pay cut, the spokesperson said. “Borrowers who can document an employment event that significantly affects the borrower’s ability to service his or her mortgage debt qualifies for a forbearance plan,” the spokesperson said. Acquirers of failed insured institutions who agree to a loss-share arrangement must abide by the FDIC Mortgage Loan Modification program for any assets purchased from the failed bank. The program provides loan modifications by reducing the borrower’s monthly housing debt to income ration (DTI ratio) to no more than 31%. “The FDIC has a loss share monitoring program responsible for surveillance and compliance monitoring of the assets covered in the shared-loss agreement,” the spokesperson said. “In this oversight capacity the FDIC will review loss share servicers forbearance policies and ensure compliance with the shared-loss agreement.” The total number of failed banks reached 92 for 2009 after regulators shut down three more on Friday, costing the FDIC's deposit insurance fund $2.02bn. Write to Jon Prior.