In the wake of Hurricane Sandy, President Obama this week issued disaster declarations for Connecticut, New York and New Jersey, which opens the door for mortgage bankers to offer forbearance and foreclosure relief to homeowners.
Early in the week just New York and New Jersey were on the list.
The President also signed federal emergency declarations for Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and West Virginia -- at the request of state governors.
In response, the Department of Housing and Urban Development imposed a 90-day moratorium on foreclosures by FHA-approved mortgage bankers. Servicers are expected to exercise forbearance on foreclosures in the Hurricane impacted areas of Connecticut, New York and New Jersey.
In disaster areas, HUD also can offer special loan programs for mortgagors seeking to rebuild or repair their homes. HUD also provides loan programs to state and local governments seeking to rehabilitate housing or repair public infrastructure.
“Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said HUD secretary Shaun Donovan. “Whether it’s foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands ready to help in any way we can,” Donovan said
Freddie Mac is allowing its servicers to suspend foreclosure and eviction proceedings for up to one year in disaster areas, according to Tracy Mooney, senior vice president of single-family servicing, and REO at the GSE.
In other areas, Freddie servicers have the discretion to exercise long- term forbearance if the borrower’s home or place of employment has been damaged by the storm. “Freddie Mac has authorized the nation's mortgage servicers to provide a full range of mortgage relief options to affected borrowers with mortgages owned or guaranteed by Freddie Mac,” Mooney said.
Fannie Mae is allowing its servicers to grant forbearance to any borrower affected by Hurricane Sandy.
“Under Fannie Mae’s disaster relief guidelines, a servicer may temporarily suspend or reduce a homeowner’s mortgage payments for up to ninety days if the servicer believes a natural disaster such as Hurricane Sandy has adversely affected the value or habitability of the property or if the natural disaster has temporarily impacted the homeowner's ability to make payments on their mortgage,” the mortgage giant said.
The hurricane has
