The government-sponsored enterprises (GSEs) and the U.S. Department of Housing and Urban Development (HUD) have set up response strategies to aid homeowners that fell victim to the devastation created by Hurricane Sandy.
Freddie Mac issued a statement that ‘strongly encourages servicers’ to help hurricane-impacted borrowers with Freddie Mac-owned loans. The GSE requests that servicers suspend foreclosure and eviction proceedings for up to 12 months, waive assessments of penalties or late fees against borrowers with disaster-damaged homes, and not report forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
‘Forbearance on mortgage payments for up to one year is one of several options our servicers have been instructed to offer borrowers on a case-by-case basis,’ says Tracy Mooney, senior vice president of single-family servicing and real estate owned at Freddie Mac.
Fannie Mae also offered a response to the hurricane, issuing a statement noting that servicers ‘may temporarily suspend or reduce a homeowner's mortgage payments for up to 90 days if the servicer believes a natural disaster such as Hurricane Sandy has adversely affected the value or habitability of the property, or if the natural disaster has temporarily impacted the homeowner's ability to make payments on their mortgage.’ The GSE says that servicers can grant this temporary relief even if they cannot contact the impacted homeowner immediately, but the GSE adds that servicers are expected to establish contact with affected homeowners within 90 days.
‘We understand the disruption that a storm such as Sandy can have on people's lives, and we've made it easy for our servicers to offer relief to those who need it,’ says Leslie Peeler, senior vice president of Fannie Mae's national servicing organization. ‘Servicers are on the front lines with homeowners and we are grateful for their efforts to help borrowers.’
Separately, HUD has announced will provide foreclosure relief and mortgage insurance to hurricane-impacted homeowners in New York and New Jersey, as well as federal disaster aid to the affected states.
‘Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,’ says HUD Secretary Shaun Donovan. ‘Whether it's foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands ready to help in any way we can.’
(Photo courtesy of The Birkes.)