Agencies Announce Mortgage Relief Strategies for Disaster Victims

The GSEs and ""HUD"":http://portal.hud.gov/hudportal/HUD are rolling out relief strategies for servicers and borrowers caught in the devastation brought on by Hurricane Sandy.

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HUD secretary Shaun Donovan announced Wednesday that the department is working to speed up federal disaster assistance to areas in New York and New Jersey following the passage of the storm. The announcement follows a disaster declaration for those states from President Obama.

According to a release, HUD is currently contacting state and local officials in New York and New Jersey to discuss opportunities to use its Community Development Block Grant (CDBG) and HOME programs to re-allocate federal resources toward disaster recovery efforts. Federally guaranteed loans are being offered for housing rehabilitation and economic development in disaster areas.

HUD is also granting a 90-day forbearance on foreclosures of home mortgages insured by the Federal Housing Administration (FHA).

In addition, HUD reminds homeowners that its Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and have to rebuild or buy another home. Borrowers from participating FHA-approved lenders are eligible for 100 percent financing, including closing costs. The announcement also notes HUD's Section 203(k) loan program, which enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage.

Fannie Mae and Freddie Mac are reaching out to assist borrowers and servicers, as well.

In a ""release"":http://freddiemac.mediaroom.com/index.php?s=12329&item=135028, Freddie ""strongly encouraged"":https://themreport.com/articles/freddie-mac-offers-mortgage-relief-to-hurricane-sandy-victims-2012-10-30 servicers to help affected borrowers with Freddie Mac-owned loans by suspending foreclosure and eviction proceedings by up to one year. Servicers are also urged to waive assessments of penalties or late fees against borrowers with damaged homes and to forgo reporting delinquencies caused by the disaster to the nation's credit bureaus.

""Fannie Mae"":http://www.fanniemae.com/portal/about-us/media/corporate-news/2012/5878.html advised the same forbearance for its servicers, who may suspend or reduce a borrower's payments for up to 90 days in the case of a natural disaster. Since a storm of Sandy's scale can make it difficult to reach borrowers, servicers may grant this temporary relief even if they cannot reach the homeowner immediately.

""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 of Fannie Mae's National Servicing Organization. ""Servicers are on the front lines with homeowners and we are grateful for their efforts to help borrowers. Our thoughts and prayers are with all of those who have been affected by the storm.""