Fannie Mae and Freddie Mac To The Rescue
In the wake of the rampage created by Hurricane Sandy, Freddie Mac has offered to help homeowners whose homes have been damaged or destroyed.
The government-controlled mortgage finance giants Freddie Mac and Fannie Mae form the backbone of the mortgage industry. They buy home loans from banks and other lenders, transform them into bonds and sell them to investors around the world. “They own or guarantee about half of all U.S. mortgages, nearly 31 million loans. Along with several federal agencies, they backed nearly 90 percent of new mortgages over the past year.”
The Hurricane Relief Plan from Fannie Mae and Freddie Mac
1. Fannie Mae announced that it will allow mortgage companies to “temporarily suspend or reduce mortgage payments for up to 90 days.” After that, affected homeowners may get additional aid, for up to a year.
2. Fannie Mae has special procedures for natural disasters that allow mortgage servicers to help borrowers by temporarily reducing or waiving their payments.
3. The relief plan applies only to homeowners who have mortgages owned or guaranteed by Freddie Mac and whose homes are located in “federally designated disaster areas.”
4. The aid program will allow homeowners to delay their payments on a part of the loan.
5. Freddie Mac has also encouraged mortgage companies to suspend foreclosure or eviction proceedings for up to one year, waive any penalties and late fees and not report delinquencies to credit report agencies.
You can also reach the helpline of Fannie Mae at 1-800-7FANNIE (1-800-732-6643) and Freddie Mac at 1-800-FREDDIE (1-800-373-3343).
Our hearts go out to all those affected by the disastrous hurricane Sandy that has left a major part of the east coast in shambles. We truly hope that life comes back to normal quickly. Stay Strong!