Hurricane Sandy has been dubbed “The Perfect Storm“, meaning it contained the perfect combination of weather conditions to cause a major catastrophe. To date, Sandy has contributed to 75 deaths, the loss of power to over 8 million residents, and countless flight cancellations. Many residents of New York City and New Jersey chose to stay put and tough it out, and while some experienced minimal damage, many others are dealing with catastrophic damage to their homes and properties. Sandy changed the lives of many in just a few short days, leaving residents bewildered and unsure where to turn.
While there is no way to completely recoup the losses that people have endured due to this tragic event, homeowners with loans through Fannie Mae and Freddie Mac will be able to find comfort in the fact that both companies announced on Tuesday that they will be extending the disaster-relief policies for borrowers that are dealing with home damaged caused by the hurricane.
Any homeowner that claims residency along the Eastern parts of the United States that have now been declared an area of disaster, as well as areas where residents are a part of the Federal Individual Assistance Program will be eligible for the extended policy, which will assist the victims of this tragedy with repairing the damage and slowly but surely moving forward.
Freddie Mac, one of the most well-known and largest residential mortgage corporations in the nation, stated that they will be providing a “full menu” of disaster relief policies for their homeowners, providing assistance when it is needed the most.
Freddie Mac is working hard to encourage various services to assist borrowers affected by the storm to suspend any type of foreclosure or eviction proceeding for up to a year, as well as waiving penalty and late fees for borrowers who are dealing with damage caused by Sandy. In today’s troubled economy, many people are having a tough enough time keeping up with their monthly payments, and allowing for a hold on eviction and foreclosure proceedings will give these struggling homeowners some time to recover.
Fannie Mae has also released a statement expressing that their policy will allow for current borrowers to enter forbearance for as long as 90 days. A large number of financial institutions as well as regulators are working on plans to assist their customers by providing mortgage aid and financial assistance during this time as well.
Tim Manni, managing editor as HSH, has stated that it is very important for borrowers to know that Freddie Mac and Fannie May can only encourage various financial services to act, and that the final decisions will be made on a case by case basis. Borrowers are strongly encouraged to contact their specific lenders to learn of their specific options.
Additionally, outside of the scope of Fannie May and Freddie Mac, HUD will be suspending home foreclosures and forbearance by 90 days on FHA insured home mortgages, and homeowners that have suffered significant damage to their homes due to Hurricane Sandy homes will receive FHA mortgage insurance, allowing them to rebuild. While the long-term effects of Hurricane Sandy are yet to be determined and homeowners are dealing with unimaginable financial loss as well as emotional trauma, it is definitely comforting to know that government agencies and financial institutions are working together to bring peace of mind and a glimmer of hope to the victims of this tragedy.