Fannie Mae and Freddie Mac are giving a much-needed break to the thousands of homeowners left homeless by Hurricane Katrina, allowing loan servicers to temporarily suspend payment collections from affected homeowners. Freddie Mac told servicers to stop collection of mortgage payments for September through November in the key major disaster areas designated by FEMA, regardless of the homes’ condition, and it is allowing up to another nine months of suspended or reduced payments on a case-by-case basis. Fannie Mae is allowing servicers to suspend payments for three months, reduce payments for up to 18 months, or create longer payback plans. Both companies are requiring that lenders temporarily discontinue reporting delinquencies to credit bureaus if the missed payments are due to a natural disaster.
Helping Hand
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