Rita won't mean foreclosure either
Freddie Mac, the government sponsored enterprise which accounts for about 1/3 of the prime secondary mortgage market and is chartered for promotion of affordable housing, announced that borrowers affected by Hurricane Rita may defer October and November payments. The same relief policies applied to victims of Hurricane Katrina including case-by-case deferrals of up to 18 months will also be available. For borrowers who already made their October payment, loan servicers can refund the payment.
Investors are still protected as these measures don’t affect the Freddie Mac guarantee on Mortgage Participation certificates. CEO Richard Syron said that Freddie Mac is committed to protecting investors while helping borrowers through unexpected shocks as “part of Freddie Mac’s mission to keep America’s housing finance system affordable, stable and liquid.”
Single family mortgage borrowers whose lives were disrupted by Hurricane Rita may defer their October and November payments if their mortgages are owned by Freddie Mac (NYSE: FRE), the company announced today. In addition to suspending the next two months of mortgage payments, Freddie Mac said it was extending to victims of Hurricane Rita all of the special mortgage servicing relief policies it announced to ease the financial pressures on borrowers with Freddie Mac-owned mortgages after Hurricane Katrina.