GSEs Address Processing Issues for Loans Held Up by Sandy
Fannie Mae and Freddie Mac are taking new steps to facilitate the closing of loans that were being processed when Hurricane Sandy slammed into the New Jersey coast early last week.
Fannie said Friday that it will accept documents and maintain pricing that was in place “at the time of the storm.” It added that underwriting and property valuation documents “will now be valid for 180 days.”
Typically, credit reports and income verification are valid for only 90 days. Appraisals are usually valid for 120 days.
Freddie is providing comparable 180-day relief to address the backlog in closings. “Freddie will maintain pricing that was in place at the time of the storm,” the GSE said.
Fannie and Freddie will be issuing guidance soon (next week) that spells out the changes.
The GSEs also received regulatory approval to expand the options servicers can use to help homeowners impacted by Hurricane Sandy.
Servicers can extend forbearance up to 12 months to homeowners impacted by Sandy and provide loan modifications once the borrower resumes their monthly mortgage payments. Servicers can also waive any late payment charges.
These and other changes will make “sure that homeowners have options to manage their housing challenges in the aftermath of Hurricane Sandy,” said Fannie president and chief executive Timothy Mayopoulos.