Freddie Mac Suspends Mortgage Payments for Borrowers Affected by Hurricane Rita
Special Relief Provided After Hurricane Katrina
Extended to New Storm Victims
MCLEAN, Va., Sept. 27 /PRNewswire/ -- Single family mortgage borrowers whose lives were disrupted by Hurricane Rita may defer their October and November payments if their mortgages are owned by Freddie Mac (NYSE: FRE), the company announced today. In addition to suspending the next two months of mortgage payments, Freddie Mac said it was extending to victims of Hurricane Rita all of the special mortgage servicing relief policies it announced to ease the financial pressures on borrowers with Freddie Mac-owned mortgages after Hurricane Katrina. The temporary suspension applies to Freddie Mac-owned single-family loans in federally declared disaster areas where FEMA's Individual Assistance programs are being made available. None of these temporary measures will affect Freddie Mac's guarantee on its Mortgage Participation Certificates (PCs). "We are determined to go the extra mile to help Texas and Louisiana borrowers cope with this year's unusually destructive storms in the Gulf of Mexico," said Freddie Mac Chairman and CEO Richard F. Syron. "Protecting investors while helping borrowers overcome unexpected shocks like Hurricanes Rita and Katrina is part of Freddie Mac's mission to keep America's housing finance system affordable, stable and liquid," Syron added. After November servicers have the discretion to continue suspending or reducing payments on Freddie Mac-owned mortgages for a total of 12 months on a case-by-case basis, depending upon each borrower's specific circumstances. Servicers must make their determinations before the mortgage's December payment due date. A servicer is the company to which borrowers send their monthly mortgage payments. For those borrowers who may have already made their October mortgage payments, Freddie Mac is giving its servicers the discretion to automatically return payments withdrawn through an automated clearinghouse but not yet reported to Freddie Mac. Borrowers who made their October payments through other means have the option to contact their servicers to request their payment's return. In either case, borrowers will still be required to work with their servicer to reinstate their mortgage once the temporary suspension period ends. Freddie Mac today also instructed its servicers: * Not to report to credit bureaus any reversed and suspended payments on Freddie Mac-owned loans as a result of Hurricane Rita during the suspension period; * To suspend all late fees, collection and foreclosure activities in the federally declared major disaster areas during the suspension period; * To extend to all National Guard members on state duty involved in Hurricane Rita recovery operations mortgage relief comparable to the relief available under the Servicemembers Civil Relief Act. Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and nearly four million renters in America. http://www.FreddieMac.comRELATED LINKS
SOURCE Freddie Mac
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