Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MCLEAN, Va. – Freddie Mac has implemented several special policies designed to put emergency funds in the pockets of single-family mortgage borrowers affected by Hurricane Katrina and give them some financial relief. To start, the housing Government Sponsored Enterprise is instructing its servicers to suspend mortgage collections for affected borrowers during September, October and November in some of the key major disaster areas designated by FEMA. The temporary suspension will apply to every borrower with a Freddie Mac-owned single family mortgage in those FEMA designated areas, regardless of the condition of the home. After the three-month suspension, servicers will have the discretion to continue suspending or reducing payments on Freddie Mac-owned mortgages for an additional nine months on a case-by-case basis, depending on each borrower’s specific circumstances. Servicers must make their determinations before the mortgage’s December payment due date. Another new policy announced by Freddie Mac to help these borrowers gives servicers the discretion to return September mortgage payments that were already made but not yet reported to Freddie Mac. Borrowers also have the option of contacting their servicer to request the return of their September payment to help them deal with short-term financial emergencies. Borrowers will still be required to make all mortgage payments once the temporary suspension period ends. In cases where borrower payments have been reported, servicers should contact Freddie Mac for additional instructions. Mortgage payments typically are not reported until the 16th of the month in which they’re due. Other policy changes implemented by Freddie Mac to assist the victims of Hurricane Katrina include: * servicers should not report to credit bureaus any reversed and suspended payments on Freddie Mac-owned loans as a result of Hurricane Katrina during the suspension period; * servicers should suspend all late fees, collection and foreclosure activities in the storm-affected areas during the three-month suspension period; * servicers have the option to advance interest on any Freddie Mac mortgage granted forbearance under the company’s special Hurricane Katrina policies. Freddie Mac stressed that the new policies apply only to Freddie Mac-owned loans on homes in major disaster areas designated by FEMA as qualifying for individual assistance in areas affected by Katrina. The company and the Freddie Mac Foundation are also contributing a total of $10 million to organizations supporting relief efforts in the areas devastated by Katrina. -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.