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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

Freddie Mac may make special announcements through press releases, Industry Letters, Guide Bulletins, and Single-Family Advisory e-mails.

Consult Guide Chapter 68 for Disaster Policies

In an effort to protect 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:

• Placing an impacted borrower, based upon the borrower’s specific circumstances, into a forbearance plan for up to 12 months, resulting in suspension of collection and foreclosure proceedings.
• Not assessing late charges for, or reporting to credit repositories, impacted borrowers who have been placed on a disaster-related forbearance plan or who are paying as agreed on a Trial Period Plan, or repayment plan.
• Providing transition assistance from the disaster-related forbearance plan into an appropriate relief or workout option to cure the delinquency.
• Providing requirements to evaluate borrowers who were performing on a prior Trial Period Plan with the opportunity to transition into another Trial Period Plan at the end of the disaster-related forbearance period.
• Providing help with options for local, state, or federal disaster assistance.
• Ensuring the release of insurance funds to borrowers who are less than 31 days delinquent at the time of a disaster in a timely manner to help expedite repairs.

Review Special Requirements for Borrowers Impacted by an Eligible Disaster

Determine if borrowers are eligible for the Disaster Hardship Modification:

• Designed for borrowers whose hardship resulted from an Eligible Disaster but are able to resume making their pre-disaster mortgage payment, the Disaster Relief Modification provides a modification that requires a monthly payment  that is equal to, or slightly less than, their existing payment. Eligible borrowers must complete a Trial Period Plan. For more information on the Disaster Relief Modification and Eligible Disasters, please refer to Bulletin 2013-15.
• See Guide Chapter B65.12.2 to learn more about the Disaster Relief Modification.
• Register for the Freddie Mac Guide Bulletin 2013-15 Overview webinar to learn more about the Disaster Relief Modification and changes to disaster-related requirements.

Many of our relief options have been updated and expanded for borrowers who were current or less than 31 days delinquent at the time of disaster:

• Review Guide Chapters B65, Workout Options, most notably the Streamlined Modification, and C65, Home Affordable Modification Program, Trial Period Plan eligibility.

Refer to Guide Exhibit 52 for Assistance Programs

Guide Exhibit 52 details information regarding FEMA, Small Business Administration, and Federal Housing Administration 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.

Training

Please visit Freddie Mac's Learning Center Web page for additional information on Freddie Mac training programs and references tools.