Hurricane Sandy Garners Mortgage Relief from Freddie Mac

Home destroyed by hurricane
Yesterday Freddie Mac and Fannie Mae broadened their disaster-relief policy to borrowers affected by Hurricane Sandy. Freddie Mac released a press release stating their efforts to assist with the Hurricane Sandy damage.

"Freddie Mac has authorized the nation's mortgage servicers to provide a full range of mortgage relief options to affected borrowers with mortgages owned or guaranteed by Freddie Mac," said Tracy Mooney, Senior Vice President of Single-Family Servicing and Real Estate Owned at Freddie Mac. "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."

Freddie Mac encourages mortgage lenders to offer help in three ways: suspend foreclosure and eviction proceedings for up to 12 months, waive assessments of penalties or late fees against borrowers with disaster-damaged homes and stop reporting forbearance or delinquencies caused by the disaster to credit bureaus.  

Hurricane Sandy hit the Northeast coast of the United States and caused damage in multiple realms. Millions of people lost power and the storm killed at least 50 Americans, according to reports by Reuters. The storm is being credited as the largest storm to hit the United States in generations, and one of the most expensive. Initial reports are estimating the damage between $30 billion and $50 billion.

The assistance programs are scheduled to be offered in the affected states of Connecticut, Delaware, Maine, Maryland, Massachusetts, North Carolina, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and Vermont. Additional areas might be added due to the storms after-effects, such as flooding.

Homeowners should be aware that the home loan relief options will be given at the lender’s discretion. Freddie Mac is not a provider of home loans, but they are the largest source of home loan financing in the country. Due to this, they cannot enforce mortgage lenders to comply with their requests, but they are strongly suggesting that lenders assist during this difficult time.

A natural disaster does not guarantee home loan relief. Borrowers should contact their mortgage lenders as soon as possible to report the damage. Borrowers should offer up any necessary documentation and remain updated on the case.