Freddie Expands Guidance on Forbearance

Freddie Mac is issuing new and expanded guidance for servicers that extends additional forbearance for victims of hurricanes Katrina and Rita.The new guidance, which is expected to be issued Dec. 1, will extend forbearance on mortgage payments for an additional 12 months on a case-by-case basis. Servicers will also have the latitude to extend forbearance by block, ZIP code, and even whole counties, according to Freddie vice president Ingrid Beckles. Freddie Mac is also considering extending its 90-day moratorium on foreclosures, she told a Women in Housing and Finance Symposium in Washington. WHF panelists said the industry still does not have a handle on the extent of the damages to properties in the Gulf Coast states, whether the properties can be repaired and inhabited again, or even whether borrowers intend to live in the properties again, in order to make loan modification or foreclosure decisions. However, many borrowers in the hurricane disaster areas are making payments. Fannie Mae has already issued guidance on extending its forbearance in the affected Gulf Coast areas.