Freddie Suspends Foreclosures for Ike Victims

Freddie Mac (FRE: 1.14 -1.72%) said Friday that it had ordered servicers to suspend all foreclosure sales on properties with Freddie Mac-owned mortgages in the federally declared disaster areas caused by Hurricane Ike, in both Texas and Louisiana.

“Freddie Mac is taking this step because the extensive damage Hurricane Ike caused has made it difficult for our servicers to get the information they need to make case-by-case decisions about forbearance or other workout options,” said Ingrid Beckles, vice president of servicing and asset management at Freddie Mac.

The suspension will extend through the end of this year, and includes mortgages that were in default prior to Hurricane Ike. Servicers will be required after the suspension ends to consider individual circumstances in determining whether additional foreclosure relief should be extended or whether to proceed with foreclosure, Freddie Mac said.

Both GSEs have regularly suspended foreclosures after natural disasters, including after Hurrican Katrina struck Louisiana and Mississippi in 2005.

Today’s announcement only applies to properties with Freddie Mac-owned mortgages in Texas or Louisiana counties, municipalities or parishes that were declared federal disaster areas and where federal aid in the form of individual assistance is available.

For more information, visit http://www.freddiemac.com.