Freddie Mac on Tuesday offered to help borrowers whose homes were damaged or destroyed by Hurricane Sandy, which could include temporarily suspending or reducing mortgage payments, for up to one year.

The relief would apply only to homeowners with mortgages owned or guaranteed by Freddie Mac and whose homes are in certain federally designated disaster areas. Options would be offered to homeowners on a “case-by-case basis” by their mortgage servicers.

Fannie Mae also said that it has procedures for natural disasters that allow mortgage servicers to help borrowers by temporarily reducing or waiving their payments.

Freddie Mac and Fannie Mae buy home loans from banks and other lenders, package them into bonds and then sell them to investors around the world. They own or guarantee about half of all U.S. mortgages, or nearly 31 million loans. Along with several federal agencies, they backed nearly 90 percent of new mortgages over the past year.

The government rescued Freddie and Fannie in 2008 after they incurred massive losses on risky mortgages. Taxpayers have spent about $170 billion to rescue the companies.

Freddie Mac also on Tuesday encouraged mortgage servicers to suspend foreclosure or eviction proceedings for up to one year for affected homeowners, waive penalties and late fees and not report delinquencies to credit report agencies.

Homeowners should contact their mortgage servicer or call Freddie Mac for more information, the company said.

Source: Yahoo! Finance

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