As it did following the devastation of Hurricane
Sandy, Freddie Mac has made the full menu of its mortgage relief policies available
to borrowers in the Colorado area. The
state has been hit by days of flooding that, according to the latest news reports,
are likely to have destroyed 11,000 homes.
Freddie Mac's disaster relief
policies enable servicers to help borrowers with homes in presidentially
declared Major Disaster Areas where federal Individual Assistance programs are
being made available. Under the
directive issued by Freddie Mac today servicers can place borrowers with
properties affected by the flooding on forbearance and suspend foreclosures for
up to 12 months. This forbearance need
not be reported to the nation's credit bureaus. Servicers can waive late fees assessed against
borrowers whose homes were damaged by the disaster. Evictions and lock-outs can also be suspended
for up to 90 days.
When forbearance ends, a new Freddie
Mac option allows servicers to add missed mortgage payments to the outstanding
loan balance and extend the term of the loan in order to keep the monthly
mortgage payment essentially unchanged.
Freddie Mac is also reminding servicers
to consider Freddie Mac's standard relief policies, including forbearance or
mortgage modifications, for borrowers who work in eligible disaster areas but
live in unaffected areas.
Tracy Mooney, Senior Vice President
of Single-Family Servicing and REO at Freddie Mac said, "Freddie Mac is
urgently reminding the nation's mortgage servicers about the full range of
mortgage relief options they can provide to affected borrowers with mortgages
we own or guarantee, including forbearance on mortgage payments for up to one
year. We strongly encourage borrowers to contact their servicers, who are fully
authorized to work with them on a case-by-case basis."
Fannie Mae is expected to issue a
similar emergency declaration.