Freddie Mac Extends Deadline for Foreclosure Suspension in Gulf Coast Region

MC LEAN, Va. – Freddie Mac has extended through Feb. 28, 2006 its deadline for foreclosure suspensions on mortgages on homes in Hurricanes Katrina and Rita disaster areas. The original deadline was Dec. 1. To make the post-Dec. 1 extension process more efficient for borrowers, Freddie Mac is waiving its usual documentation requirements and giving servicers the authority to extend forbearance to all of the borrowers in especially distressed areas, as well as to individual borrowers on a case-by-case basis. Freddie Mac is also telling servicers not to report hurricane-related delinquencies to credit agencies through Feb. 28 and is also strongly advising them to forgo collecting penalties or late fees as mortgages are reinstated. A Nov. 30 policy bulletin issued by the company said it decided to extend the deadline “so servicers can continue to extend the highest level of understanding to storm victims seeking to extend the mortgage payment suspension period that expires today, Dec. 1.” The new bulletin strongly emphasizes the importance of helping borrowers stay in their homes after Feb. 28 when the foreclosure suspension is scheduled to expire. If after making every effort to assist a borrower in retaining home ownership a servicer determines there is no viable option to foreclosure, the bulletin says the servicer must request Freddie Mac’s prior written approval to initiate a foreclosure or to resume a foreclosure action that was interrupted by the mandatory forbearance period. The new bulletin only applies to Freddie Mac-owned loans on homes in major disaster areas designated by FEMA as qualifying for individual assistance.