Next week, Freddie Mac and Fannie Mae will issue additional guidance to homeowners that suffered home damage or experienced a disruption in income by Hurricane Sandy.
The revised Freddie Mac relief policy authorizes mortgage servicers to maintain mortgage pricing that was in place at the time of the hurricane, which was delivered through the government-sponsored enterprise’s bulk guarantor channel.
Fannie Mae is doing the same to facilitate completion of mortgage loans that were in process during the tropical storm by accepting documents and maintaining mortgage prices that were in place.
Underwriting and property valuation documents will now be valid for 180 days in storm-damaged areas, compared to the typical 90 days.
"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," said Tracy Mooney, senior vice president of Single-Family Servicing and Real Estate Owned at Freddie Mac.
She added: "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."
Fannie Mae and Freddie Mac’s also reaffirmed servicers to authorize various measures in the wake of the storm, including waiving any late payment charges, appropriately extend forbearance for up to 12 month and a 90-day foreclosure sale suspension, which was already announced to the market.
"Since 2009, Fannie Mae has responded to the credit crisis by providing approximately $3 trillion in liquidity to the mortgage market so that millions of Americans can buy homes, refinance their loans or rent affordable housing. In that time, we’ve helped approximately 1.3 million struggling borrowers avoid foreclosure," said Timothy Mayopoulos, president and CEO of Fannie Mae.
He added, "Now, we’re responding to another crisis by making sure that homeowners have options to manage their housing challenges in the aftermath of Hurricane Sandy. We want families to know that we are here to help them."