Freddie Extends Storm-Related Forbearance

Freddie Mac has extended its foreclosure moratorium for three months in the areas devastated by hurricanes Katrina and Rita, and it has given its servicers the leeway to suspend mortgage payments for certain borrowers for up to 12 months."We strongly encourage borrowers now benefiting from the mandatory forbearance that expired [Dec. 1] to contact their mortgage servicers as soon as possible to discuss next steps," Freddie vice president Patricia Chen said. Fannie Mae's forbearance policy allows for the suspension of mortgage payments for up to 18 months. Fannie also expects its servicers to "discontinue any foreclosure or collection activities until they can review any effect the disaster may have had on the condition of the property or the borrower's employment or income status." Nearly 100,000 homes in New Orleans and 500,000 homes in the Gulf Coast region are uninhabitable, according to numbers compiled by Consumers Union. Lenders and servicers also are having problems getting in touch with borrowers displaced by the hurricanes. "For those borrowers ready and able to resume payments, that will mean repayment plans and loan modifications; for other borrowers, particularly those whose homes remain uninhabitable and are not sure of their plans, forbearance can be extended," Fannie spokesman Brian Faith said. The government-sponsored enterprises can be found online at http://www.freddiemac.com and http://www.fanniemae.com.