Mortgage giant Freddie Mac is extending its foreclosure suspension on mortgages in the Hurricane Katrina and Rita disaster areas through the end of February, the company said today.
The government-sponsored enterprise is extending foreclosure suspension through Feb. 28, 2006, and is adopting other policies so servicers can continue to extend “the highest level of understanding” to storm victims seeking to extend the mortgage suspension period that ends today, the company said.
The new policy only applies to Freddie Mac-owned loans on homes in major disaster areas designated by FEMA as qualifying for individual assistance, the company said. The mandatory forbearance and foreclosure suspensions adopted after Hurricanes Katrina and Rita have helped several thousand borrowers cope with the aftermath of the two storms.
To make the post-Dec. 1 extension process more efficient for more borrowers, Freddie Mac is waiving its usual documentation requirements and giving servicers the authority to extend forbearance to all of the borrowers in especially distressed areas, the company said. Individual borrowers will also be allowed to extend forbearance on a case-by-case basis, according to the company.
Freddie Mac is also telling servicers not to report hurricane-related delinquencies to credit agencies through Feb. 28 and strongly advising them to forego collecting penalties or late fees as mortgages are reinstated, the company said.
“Our servicers have done an outstanding job helping Gulf Coast borrowers. Today’s announcement extends our mortgage relief policies to the borrowers who may need more time to recover their incomes or homes while helping our servicers resume normal business operations,” said Freddie Mac Chairman and CEO Richard Syron in a statement.
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