Shortly after instructing servicers to provide mortgage relief for those affected by Hurricane Sandy, Freddie Mac announced that it has suspended all evictions and foreclosures in major disaster areas.
In addition to previous recommendations, the government-sponsored enterprise will now automatically suspend evictions and foreclosure sales for 90 days. Servicers will also be authorized to verbally grant 90-day forbearance to borrowers in disaster areas. Lastly, Freddie will expedite the distribution of insurance proceeds on storm damage claims to help speed up home repairs.
"Given early assessments of Hurricane Sandy's devastating impact, we are preparing steps that will authorize automatic and immediate action by the nation's mortgage servicers to help more borrowers with mortgages owned or guaranteed by Freddie Mac," said Tracy Mooney, senior vice president of single-family servicing and real estate owned at the GSE.
Previously, Freddie had suggested that servicers suspend foreclosure and eviction proceedings for up to 12 months, waive late fees against borrowers and forgo reporting forbearance or delinquencies associated with the hardship caused by the storm.