Government-sponsored mortgage backers Freddie Mac, Fannie Mae and the Federal Housing Administration are offering mortgage relief to some borrowers whose homes were damaged by Hurricane Sandy, the superstorm that has crippled communities across the Northeast.
The relief is available to borrowers whose homes were damaged by Hurricane Sandy and which are located in jurisdictions that President Obama has declared "major disaster areas." The three entities back 90 percent of the mortgages that are originated today.
Only the states of New Jersey and New York have been designated major disaster areas so far. Hurricane Sandy reportedly has left 8.4 million people without power and may cause as much as $20 billion in property damage, The Associated Press reported. About 300,000 properties worth nearly $90 billion were at risk of damage by Sandy's storm surge,AOL Real Estate previously reported.
Freddie Mac said in a statement that it is extending its "full menu of relief policies for borrowers affected by disaster" while a spokesperson for Fannie Mae told AOL Real Estate that lenders that service Fannie Mae-backed mortgages are authorized to grant up to 90 days forbearance to borrowers whose homes were damaged by Hurricane Sandy. That means that they won't be penalized if they miss a few mortgage payments.
Freddie Mac said in its statement that it would also:
• suspend "foreclosure and eviction proceedings for up to 12 months."
• waive "assessments of penalties or late fees against borrowers with disaster-damaged homes."
• not "report forbearance or delinquencies caused by the disaster to the nation's credit bureaus."
The FHA is also granting immediate foreclosure relief and forbearance to borrowers with FHA-insured mortgages "whose properties were damaged or destroyed by virtue of the hurricane," Brian Sullivan, spokesperson of the Department of Housing and Urban Development, told AOL Real Estate. HUD oversees the FHA.
The FHA disaster relief includes:
• implementing a 90-day moratorium on foreclosures.
• encouraging banks that service FHA-insured mortgages to provide forms of mortgage relief, including forbearance.
• offering "disaster mortgage insurance," which allows disaster victims to obtain a 100-percent-financed mortgage.
The aid offered by the agencies is standard disaster relief provided under their policy guidelines, and has not been specially enhanced in response to Hurricane Sandy. Lenders that service mortgages backed by the agencies are mostly responsible for implementing the relief and exercise some discretion over doing so.
To learn if you qualify for disaster relief on a mortgage, call your lender (the company you send your mortgage payments to). You can also call 1-800-FREDDIE, 1-800-7FANNIE, or the FHA at 202-708-1112.
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