Freddie Mac Mandates 90-day Forbearance To Help Returning Service Personnel Avoid Foreclosures
June 15, 2005
McLean, VA. – In an effort to help returning service personnel facing financial problems avoid foreclosure Freddie Mac (NYSE:FRE) announced that it is requiring its 2300 mortgage servicers to automatically extend forbearance to borrowers recently released from active duty with the armed forces. This goes above and beyond the requirements of the Service Members Civil Relief Act (SCRA), which protects servicemen and women from creditors only when they are on active duty. Freddie Mac is one of the nation's largest investors in residential mortgages.
"We're extending this forbearance to make sure that lenders do not initiate or resume foreclosure for at least 90 days from a borrower's release date," explained Ingrid Beckles, Freddie Mac's vice president of default asset management. "This change gives lenders more time to work with servicemen and women and explore all relief options available."
The new policy appears in a June 10 update to Freddie Mac's Single-Family Seller/Servicer Guide.
If a service member needs assistance under the Freddie Mac policy, they should contact their mortgage servicer. The servicer will then assess the borrower's individual circumstances to determine the most suitable relief option.
Source: Freddie Mac