The government-sponsored enterprises have created a repayment program for those borrowers in New York who received Hurricane Sandy-related forbearances on monthly mortgage payments.
Representatives of both companies said the program also applies to affected borrowers in other states impacted by Sandy, including Maryland, New Jersey, Connecticut and Rhode Island.
Both companies also said they are accelerating the start date for their
Freddie Mac issued a statement saying, "We appreciate the opportunity to work with Gov. Cuomo and Superintendent Lawsky to help ensure Hurricane Sandy victims with Freddie Mac mortgages can access all of the best options available for mortgage relief."
A Fannie Mae spokesman added under the streamlined program, servicers can offer borrowers a modification without having to document hardship or their situation. It reduces the interest rate, extends the term and forbears some principal.
The spokesman said Fannie Mae told some servicers that for people affected by Hurricane Sandy go ahead and start this streamlined program now.
“We want people who are affected by Hurricane Sandy to have the help that’s appropriate for them and to get that help as soon as possible,” the spokesman said.
In April, former Department of Housing and Urban Development secretary and current New York Gov. Andrew Cuomo said current policies of Fannie Mae and Freddie Mac could leave
Letters were sent to the two GSEs as well as their regulator, the Federal Housing Finance Agency. Now, a special mortgage relief program will be available to those whose loans are owned by the agencies and who were current on their mortgage payments before the storm.
Among other provisions, the program will lower the homeowners’ interest rate to as low as 4% and extend the term of the mortgage. For those borrowers severely underwater, an additional forbearance period is an option. Fannie Mae and Freddie Mac back more than 65% of mortgages in New York.
Benjamin Lawsky, New York’s superintendent of financial services, said, “It is critical that Fannie and Freddie now follow through on their commitment by issuing clear instructions to banks and mortgage servicers to quickly implement this new program so that no Sandy victim gets tripped up by red tape and hit with an unexpected payment spike.”
However, the Cuomo administration would now like to see the GSEs allow borrowers the option to have the missed payments due to the forbearance added to the end of the original loan term, in addition to the options of a balloon payment or a higher monthly payment.
