Homeowners who were affected by last week's tornado outbreak across the South may be able to qualify for up to 12 months of suspended or reduced payments on Freddie Mac mortgages, along with other assistance as well.

Homeowners who were affected by last week's tornado outbreak across the South may be able to qualify for up to 12 months of suspended or reduced payments on Freddie Mac mortgages, along with other assistance as well.

Those with FHA mortgages in affected states may qualify for more limited relief, and all victims may be able to obtain FHA assistance in rebuilding their homes.

Freddie Mac announced today that it is offering a series of relief measures for borrowers whose homes were damaged or destroyed by the storms. To qualify, borrowers must have a Freddie Mac mortgage and live in one of the counties declared a major disaster area by President Obama.

In addition to suspending or reducing mortgage payments for up to one year, Freddie Mac has authorized a number of other measures to provide relief to borrowers who were affected by the disaster. These include suspending foreclosure or eviction proceedings against delinquent borrowers, waiving late fees or other penalties and not reporting disaster-related delinquencies or forebearances to credit reporting agencies.

All relief measures are at the discretion of the mortgage servicer handling the loan. Each case will be evaluated individually to determine what assistance may be offered.

Meanwhile, the Department of Housing and Urban Development (HUD) has announced that it is instituting a 90-day moratorium on foreclosures against homes with FHA mortgages in disaster areas in Alabama, Georgia and Mississippi.

In addition, disaster victims in those states who have lost their homes can qualify for up to 100 percent FHA financing to rebuild or purchase a new home through a Section 203(h) loan. FHA home equity loans are also available for homeowners to make repairs to damaged homes, through its Section 203(k) Home Rehab loan. Borrowers do not need to currently have an FHA mortgage to qualify.

Similar measures were instituted last week for victims of earlier storms Oklahoma as well.

Fannie Mae, the sibling agency to Freddie Mac and the nation's largest insurer of mortgage loans, has not announced any mortgage relief initiatives for victims of the recent storms as of this writing.

The lender has authorized mortgage servicers to suspend or reduce payments on mortgages backed by Freddie Mac for up to one year for borrowers

Published on September 1, 2008