Disaster Relief Policies
At Freddie Mac, we are committed to seeking ways to provide assistance to borrowers – especially when their homes have been impacted by disaster-related events. We are prepared to quickly respond with effective relief measures and guidance to help borrowers, Sellers, and Servicers through the aftermath of a disaster.
In the event a disaster strikes, borrowers whose homes have been damaged may experience disruptions in their ability to make on-time mortgage payments. Therefore, we ask Freddie Mac Sellers and Servicers to be responsive to any requests for assistance from affected borrowers using options available through our Single-Family Seller/Servicer Guide (Guide).
In addition to assisting borrowers who are disaster victims, Servicers must begin ascertaining the disaster's impact on homeowners with Freddie Mac-owned mortgages. Sellers should review the Guide and their procedures for inspecting and recertifying a mortgaged property's value, condition, and marketability when a major disaster occurs. Most importantly, we rely on both Sellers and Servicers to determine the number of impacted properties and the extent of damage to each.
Freddie Mac Policies for Major Disaster Declarations
When disaster strikes and causes extensive damage, the President of the United States may issue a Major Disaster Declaration for certain localities and authorize federal Individual Assistance programs for affected individuals and households. In the event a declaration is made, Sellers and Servicers should follow these steps:
Identify the localities designated in the Major Disaster Declaration
To find a list of eligible counties, parishes, and municipalities, visit the Federal Emergency Management Agency's (FEMA) Web site.
Look for Special Freddie Mac Announcements
Consult Guide Chapter 68 for Disaster Policies
In the interest of protecting credit ratings and financial interests of borrowers with Freddie Mac-owned mortgages who reside in the designated areas, Servicers must immediately begin following the disaster relief requirements outlined in Guide Chapter 68, which include:
- Short-term suspension of collection and foreclosure proceedings for up to 12 months from the date a disaster strikes, based on the relative merits of each case.
- Not assessing late charges or reporting to credit repositories for borrowers on a forbearance plan or paying as agreed on a repayment plan.
- Providing help with options for local, state, or federal disaster assistance.
- Monitoring and coordinating the insurance claim process.
Refer to Guide Exhibit 52 for Assistance Programs
Exhibit 52 in the Guide details information regarding FEMA, Small Business Administration (SBA), and Federal Housing Administration (FHA) assistance programs for residents of areas designated in a Major Disaster Declaration. These assistance programs are designed to supplement state or local aid that may be offered.
Review the Guide for Seller Responsibilities
Sellers should be prepared to address property damage as a result of a disaster, per Guide Section 44.2(c). Sellers should also review Guide Section 22.20 about circumstances that adversely affect the value of a mortgage, including condemnation. Sellers should also review Guide Section 44.2(a), which requires Sellers to warrant that improvements must be undamaged by fire, windstorm, and other perils.
Are You a Homeowner?
As soon as you know that you will not be able to make your mortgage payment on time as a result of a disaster, immediately contact your Servicer because help may be available to you. Learn more about alternatives to foreclosure.
Managing Distressed Properties Quick Reference (log in required).