Government to Offer Mortgage Relief to Hurricane Sandy Victims

Libby Kane
Posted

When Hurricane Sandy slammed into the East Coast, it had a massive impact, causing the first weather-related stock market closure in 27 years and about $50 billion in damages.

Now, imagine if a storm of this magnitude had flooded or otherwise damaged a home you own (and we sincerely hope it didn’t). Your concerns aren’t so much about the stock market or the $50 billion–they’re probably more along the lines of how you’ll afford to repair the damages and still make your mortgage payments.

That’s where Fannie Mae and Freddie Mac come in.

Reuters reports that Freddie Mac will offer “forbearance” to homeowners living in areas determined disaster areas by President Obama. Forbearance would allow the homeowner to reduce or suspend payments for up to one year, though cases will be evaluated individually.

Freddie Mac is also encouraging its lenders (remember, Fannie and Freddie don’t make direct mortgage loans–instead, they back loans by buying them from lenders) to pause foreclosure and eviction proceedings. Fannie Mae already had a policy in place (since 2009) that allows forbearance for up to 90 days and will be emphasizing that fact in the coming weeks.

These lenders aren’t the only ones to show compassion to those affected by Sandy–some large banks are waiving certain fees for their customers as well.