GSEs Provide Hurricane Relief

Fannie Mae and Freddie Mac are providing mortgage relief for borrowers facing hardships related to the massive and widespread damage caused by Hurricane Katrina.Fannie Mae mortgage lenders are authorized to suspend mortgage payments for up to three months, reduce payments for up to 18 months, and, in more severe cases, create longer loan payback plans. Lenders will determine appropriate relief steps by considering any uninsured losses, extended unemployment, and extraordinary expenses related to Katrina that affect mortgage payments. Under Freddie Mac's policies, servicers may reduce or suspend mortgage payments for up to 12 months for borrowers in declared major-disaster areas. Freddie is also encouraging servicers to expedite the release of insurance proceeds, waive the assessment of penalties or late fees, and not report forbearance or delinquencies caused by the disaster to the nation's credit bureaus. Freddie also announced that it is donating $50,000 to the American Red Cross to support hurricane relief efforts, and that the Freddie Mac Foundation is matching Freddie Mac employee donations to relief efforts (and will double the match if donations support Habitat for Humanity's hurricane relief efforts).