Citing Storms, Freddie Relaxes Servicer Policy

Freddie Mac has announced a temporary relaxation in certain guidelines in an effort to expedite the release of insurance proceeds to borrowers in major disaster areas who have suffered property damage.The government-sponsored enterprise said mortgage servicers can immediately release insurance funds made payable jointly to an insured borrower and the servicer if the damaged property is in a declared Major Disaster Area related to Hurricane Charley, Hurricane Frances, or Tropical Storm Bonnie. The amount can equal $20,000, one-third of the amount of the insurance draft, 10% of the affected mortgage's unpaid balance, or the amount by which the released funds exceed the unpaid balance of the mortgage, whichever is highest. "This is a critical policy change that we believe will not only help families recover more quickly from this year's disastrous wave of hurricanes, but will also help our servicers to better cope with the extraordinary demands these storms are placing on their resources," said Freddie Mac senior vice president Mike May. The GSE can be found online at http://www.freddiemac.com.