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| CNN's Gerri Willis reports on the Bush administration's latest efforts to aid those hurt by Katrina. (September 9) |
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NEW YORK (CNN/Money) -
Government housing agency Freddie Mac is suspending mortgage payments for borrowers affected by Hurricane Katrina and is planning to return some payments to cash-strapped storm victims.
Freddie Mac (Research) said the three-month suspension of mortgage collections applies to every borrower with a single-family home mortgage held by Freddie Mac in areas designated as major disaster zones.
"We are determined to do all that we can to help the victims of this disaster," Freddie Mac Chairman and CEO Richard Syron said in a statement dated Thursday.
The suspension applies regardless of the condition of the victims' homes, he said.
The Mortgage Bankers Association estimates that up to 360,000 loans valued at up to $48 billion could be directly or indirectly impacted by the storm, although it is not clear how many of those loans are owned by Freddie Mac.
Servicers -- companies to which borrowers send their monthly mortgage payments -- can extend the suspension period for Freddie Mac-owned mortgages up to a full year on a case-by-case basis, depending on the borrower's specific circumstances, the agency said in a letter sent to its 2,300 single-family servicers.
Freddie Mac also authorized banks and other lenders to return to borrowers payments on Freddie Mac-owned mortgages already made for September but not yet reported to the government agency.
Mortgage payments generally are reported on the 16th of the month in which they are due.
Borrowers with may also contact their servicer and request the return of their September payments to help them cope with short-term financial emergencies, the government agency said.
Borrowers still will be required to make all mortgage payments once the suspension period ends.
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What are companies doing to help Katrina victims? Click here.
Click here to see what lenders are doing to lend a hand.
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