Mortgage Relief for Borrowers Hit by Floods: Freddie Mac
- Apr 23, 2010
Dees Stribling, Contributing Editor
McLean, Va.–In the wake of flooding in certain parts of the East Coast, Freddie Mac has said that it will extend mortgage relief to property owners affected by the disasters. The affected states were Rhode Island, Massachusetts, New Jersey and West Virginia, and to qualify for relief, the mortgages must be Freddie Mac-associated ones on properties, both single-family and multifamily, in federally declared Major Disaster Areas.
In this case, the disaster areas were all declared in late March and early April. Besides the Freddie Mac action, assistance for residents in disaster areas can also include grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover.
According to the GSE, it is instructing its servicers to work with borrowers holding Freddie Mac-owned mortgages to receive forbearance on their payments for up to one year if necessary. Most of the workload will probably involve single-family mortgages, but holders of multifamily mortgages are also encouraged to contact their mortgage services to begin the process if necessary.
“The process might be a little different for multifamily mortgages,” a spokesman for Freddie Mac tells MHN. “But if relief is necessary, we want that to happen. Each multifamily case will be assessed on a case-by-case basis.”
Sometimes multifamily mortgages do indeed need forbearance on their payments. “After Hurricane Katrina, for instance, there were some cases of multifamily loan forbearance that lasted for a year,” the spokesman adds.
Other kinds of assistance that services can provide, according to Freddie Mac, include waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; not reporting forbearance or delinquencies caused by the disaster to credit bureaus; and suspending foreclosure and eviction proceedings for up to 12 months.