Providing Servicing Requirements for Borrowers Impacted by Hurricane Sandy
November 13, 2012
It is important that you read today’s Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-26. Freddie Mac is revising its requirements for borrowers whose property or place of employment is located in a disaster area eligible for individual assistance from the Federal Emergency Management Agency (FEMA) as a result of Hurricane Sandy. Included in the Bulletin, Freddie Mac:
- Directs Servicers and law firms to temporarily suspend foreclosure sales and evictions.
- Extends seasoning requirements for documentation and property valuation.
- Provides short-term forbearance for up to three months without the need for a written agreement and reminds Servicers that they may provide short-term forbearance based on a verbal conversation with the borrower.
- Temporarily revises certain requirements for the distribution of insurance claim proceeds to expedite the release of insurance funds to impacted borrowers.
- Provides forbearance requirements for borrowers if they are in the Home Affordable Mortgage Program (HAMP) or Freddie Mac Standard Modification Trial Period Plans.
We see this as an important step to aid Servicers, and in turn homeowners, in very difficult situations brought on by the disaster.
Monitor the FEMA Website
Servicers must monitor the FEMA web site. New eligible disaster areas continue to be identified as damage assessments and processing of federal assistance requests are completed.
- Review Guide Bulletin 2012-26.
- Review Guide Chapter 68, Servicing Mortgages Impacted by Disaster.
- Review Guide Chapters A65, B65, C65 to review standard mortgage relief options to address situations affected by disaster, but not declared a Major Disaster Area by the president of the United States.
- Read our Single-Family News Center article, Doing Business in Areas Affected by Hurricane Sandy.
- Read our disaster relief policies.
- Visit FEMA’s website to see updates to the list of locations declared Major Disaster Areas by the president of the United States.
- Call your Freddie Mac representative.