MCLEAN, Va. – Fannie Mae and Freddie Mac are expanding their assistance to borrowers whose homes were damaged or destroyed by Superstorm Sandy.
The government-controlled mortgage companies said Friday that they will automatically suspend evictions and foreclosures in disaster areas for 90 days.
They also gave the banks and other financial firms that service mortgages guaranteed by Fannie and Freddie more flexibility and independence to suspend payments, provide loan modifications or waive late payment charges for homeowners in these areas.
Fannie Mae and Freddie Mac also said they would expedite the distribution of insurance payments on storm claims to help speed up repairs.
Separately, the Federal Housing Administration already has suspended foreclosures for 90 days for homes affected by Sandy in New Jersey, New York, Connecticut and Rhode Island. The FHA, which is part of the Department of Housing and Urban Development, insures mortgages for low- and middle-income borrowers.
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.
The government took over the two companies in September 2008 during the financial crisis after both racked up massive losses on risky mortgages. Taxpayers have spent about $170 billion to rescue them, the costliest bailout of the crisis.