Freddie Mac recently reminded homeowners and mortgage servicers of its immediate disaster relief options for those affected by the outbreak of tornadoes in Kentucky and the surrounding areas.
“We encourage everyone to make their safety the priority,” said Bill Maguire, Freddie Mac’s vice president of Single-Family Servicing Portfolio Management, in a statement. “Along with our mortgage servicers, Freddie Mac stands ready to provide immediate mortgage relief options to those affected by the severe storms, straight-line winds, flooding and tornadoes that impacted Kentucky and the surrounding areas.”
Freddie Mac’s disaster relief options are available to homeowners whose homes or places of employment are located in presidentially declared Major Disaster Areas where federal individual-assistance programs are made available to affected individuals and households.
Once safe, homeowners whose homes are impacted should contact their mortgage servicer—the company they send their monthly mortgage payments to—as soon as possible to talk about available mortgage relief options. This also includes homeowners whose places of employment have been impacted resulting in a financial hardship that prevents them from being able to make their monthly payment.
Mortgage servicers may immediately leverage Freddie Mac’s short-term forbearance programs to provide homeowners mortgage relief for up to 12 months without incurring late fees or penalties. Foreclosure and other legal proceedings are also suspended while homeowners are on a forbearance plan.
Once back on their feet, homeowners have several options to make up the missed payments, including additional forbearance, if needed:
- Reinstatement: The option for a lump sum payment is available, but never required, if the homeowner’s loan is owned by Freddie Mac. If possible, however, it is the fastest way to get back on track.
- Repayment Plan: Homeowners pay more each month on top of their existing mortgage payment to make up the missed payments.
- Payment Deferral: This option is available if homeowners can resume making their regular monthly payment. With payment deferral, homeowners become immediately current on their mortgage and missed payments are added to the end of the mortgage term without interest or penalties.
- Loan Modification: If a homeowner is facing a long-term financial hardship but can make a reduced mortgage payment, a modification may be the best option.
Freddie Mac also reminds servicers that its disaster relief options are available to affected homeowners outside the declared disaster areas if their home incurs a disaster-related insured loss that impacts their ability to make their mortgage payment.
Affected homeowners currently on a COVID-19-related forbearance or other relief plan, including from a previous natural disaster, should contact their servicer to discuss options.
Affected borrowers can review Freddie Mac’s disaster preparedness series on My Home by Freddie Mac to get disaster relief FAQs, as well as useful information on the key documents needed to start the recovery process, financial preparedness tips, making an emergency checklist, as well common scams that happen after a natural disaster and how to avoid them.
Source: Freddie Mac