Mortgage Relief for Flood Victims from Freddie Mac and HUD

Freddie Mac's full menu of relief policies for borrowers affected by disasters is being extended to families whose homes were damaged or destroyed by the recent floods in Rhode Island, Massachusetts, New Jersey and West Virginia and are located in federally declared major disaster areas. "We are instructing our servicers to work with borrowers with Freddie Mac-owned mortgages to receive forbearance on their mortgage payments for up to one year," said Ingrid Beckles, senior vice president of default asset management at Freddie Mac. The GSE gives servicers the discretion to reduce or suspend mortgage payments for up to 12 months for borrowers. Each case must be individually assessed to determine, however, Freddie Mac also strongly encourages servicers to help affected borrowers by waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus; and suspending foreclosure and eviction proceedings for up to 12 months. The U.S. Department of Housing and Urban Development is also stepping up to help borrowers. HUD said it will speed federal disaster assistance to six counties in New York State, including Nassau, Orange, Richmond, Rockland, Suffolk and Westchester, and provide support to homeowners and low-income renters forced from their homes. HUD has granted a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration-insured home mortgages. HUD's Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers from participating FHA-approved lenders are eligible for 100% financing, including closing costs. HUD's Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage.