Borrowers on the US east coast affected by Hurricane Sandy could be eligible for a temporary break on their home loan payments from Freddie Mac and Fannie Mae, reported The Wall Street Journal.
The mortgage giants announced that firms collecting payments for them can grant breaks to borrowers devastated by Sandy. Respite will come in the form of a forbearance plan, which will allow borrowers to delay their monthly instalments.
According to Fannie Mae, the plan allows mortgage collector companies or loan servicers to temporarily suspend or cut borrower’s mortgage payments for up to 90 days. After that, they may get additional aid, typically up to 12 months.
“We understand the disruption that a storm such as Sandy can have on people’s lives, and we’ve made it easy for our servicers to offer relief to those who need it,” said Leslie Peeler, Senior Vice President (Loan Servicing Operations) at Fannie Mae.
Meanwhile, Freddie Mac said they can grant a break on payments for up to a year. Apart from encouraging loan servicers to temporarily suspend foreclosures and evictions for up to a year, they have allowed them to waive fees and not report delinquencies caused by the storm.
Related Stories:
UK lending scheme pushes up mortgage approvals
Fixed-rate mortgages more appealing
New regulations could bruise US mortgage market