Freddie Mac has declared a mandatory suspension of evictions and foreclosures on homes secured by mortgages it owns or guarantees which were affected by Hurricane Sandy. The company announced this and other steps today after consulting with its conservator the Federal Housing Finance Agency (FHFA.) Hurricane Sandy and its related storm surge did enormous damage on October 28 and 29 along the east coast from North Carolina to Connecticut and especially in seacoast New Jersey and several boroughs of New York City.
On October 30 Freddie Mac announced it was making its full range of disaster relief services available, allowing servicers to suspend foreclosure and eviction proceedings for up to 12 months on a case-by-case basis, waiving penalties or late fees, and not reporting delinquencies or forbearance to credit bureaus. Today's announcement expands the scope of these services to authorize servicers to:
- Automatically suspend for 90-days evictions and foreclosure sales for borrowers with homes secured by Freddie Mac owned-or guaranteed mortgages and located in eligible disaster areas with the option to extend suspensions for up to 12 months on a case-by-case basis. Borrowers are still encouraged to contact their servicers to discuss their situation.
- Authorize servicers to verbally grant 90-day forbearances to all borrowers in eligible disaster areas, including borrowers with mortgages modified under the Home Affordable Modification Program (HAMP) or who are currently in a HAMP or Standard Modification Trial Period Plan.
- Expedite the distribution of insurance proceeds on storm damage claims to speed up repairs of storm-damaged homes.
Additionally, Freddie Mac will maintain pricing that was in place at the time of the storm for mortgages that are secured by homes in eligible disaster areas and delivered through Freddie Mac's bulk guarantor channel.
Tracy Mooney, Senior Vice President of Single-Family Servicing and Real Estate Owned at Freddie Mac said, "Given early assessments of Hurricane Sandy's devastating impact, we are preparing steps that will authorize automatic and immediate action by the nation's mortgage servicers to help more borrowers with mortgages owned or guaranteed by Freddie Mac. These steps are intended to provide borrowers with peace of mind and help lay the groundwork for a faster recovery in the neighborhoods and communities affected by the storm."
Homeowners in affected areas should contact their mortgage servicer or call Freddie Mac at 800-FREDDIE.
