Freddie Mac has extended its mortgage relief policies for borrowers affected by Hurricane Katrina in locations declared Major Disaster Areas by President Bush. Freddie Mac also announced today that it is donating $50,000 to the American Red Cross to support hurricane relief efforts.
In addition, 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.
"Our goal is to help families affected by Hurricane Katrina to keep their homes," said Richard F. Syron, Freddie Mac Chairman and CEO. "We also want to ensure that families who are displaced from their homes receive the assistance they need."
Freddie Mac's disaster relief policies provide a number of ways for mortgage servicers to provide borrowers with relief that can help protect their credit ratings and financial interests in their homes. A mortgage servicer is the company to which borrowers send their monthly mortgage payments.
Freddie Mac's disaster relief policies also strongly encourage servicers to extend several other measures to help affected borrowers with Freddie Mac-owned loans. These include:
* Expediting the release of insurance proceeds to help borrowers secure materials, labor and other resources to repair their homes;
* Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and,
* Not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
Freddie Mac allows servicers additional discretion to reduce or suspend mortgage payments for up to 12 months for borrowers with Freddie Mac-owned mortgages in the declared major-disaster areas. Each case must be individually assessed to determine which alternative will best fit the homeowner's circumstances.
"Freddie Mac and the nation's mortgage servicers are working together to help families affected by Hurricane Katrina receive mortgage relief so they can focus their energies on putting their lives and homes back together," Syron added. "These mortgage relief provisions are intended to expedite the release of insurance proceeds to help borrowers secure materials, labor and other resources to get the home repair process underway."
Mortgage servicers working with Freddie Mac have helped an estimated 100,000 families over the past two years from losing their homes due to financial difficulties.
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