NEW YORK ( TheStreet) -- Banks and regulators are stepping up efforts to provide mortgage aid and other forms of financial relief to victims of Hurricane Sandy in the Northeast.
Fannie Mae (FNMA) is directing servicers to temporarily suspend or reduce monthly payments for 90 days for homeowners adversely affected by the Hurricane.
Freddie Mac (FMCC) said a "full menu of relief policies" will be available for affected borrowers with mortgages owned or guaranteed by the agency.
Servicers have been instructed to offer, on a case-by-case basis, a range of relief options including forbearance or delay of mortgage payments for as long as one year, suspension of foreclosure and eviction proceedings for up to 12 months, waiver of penalties or late fees against borrowers with disaster-damaged homes, and not reporting forbearance and delinquencies caused by disaster to the national credit bureaus.
The U.S. Department of Housing and Urban Development (HUD) said it will speed federal disaster assistance to New York state and New Jersey, providing support to homeowners and low-income renters dislocated from the so-called superstorm. President Obama has declared several counties in New York and New Jersey as disaster zones, which allows eligible families to have access to foreclosure relief and other assistance. "Families who may have been forced from their homes need to know that help is available to begin the rebuilding process," said HUD Secretary Shaun Donovan. "Whether it's foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands ready to help in any way we can." HUD is granting a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. Those whose homes have been destroyed by the disaster will be able to get FHA mortgage insurance to rebuild. Read more about disaster assistance available through HUD. Meanwhile, banks are scrambling to reopen branches in the affected states, especially in New York and New Jersey. "We are working hard to get some of our tri-state branches open Oct. 31, and we have half of our ATMs up and running," Ryan McInerney, CEO of JPMorgan Chase's (JPM) Consumer Banking unit, said in an email to customers yesterday. Hundreds of Chase branches have been damaged by the storm, but the bank is mobilizing portable generators to get centrally located branches open as soon as possible. JPMorgan is also extending waivers on fees, announced earlier this week, to Nov. 1 to customers in affected states.
Citigroup (C) will reopen select branches in New York, Connecticut, New Jersey and Pennsylvania. For information on the status of local branches, customers should contact customer service. The New York-based bank is offering to waive fees associated with overdraft and late fees, wiring of funds to affected customers and early CD withdrawals. Customers who make withdrawals from ATMs outside its network will be refunded. Other banks, including Bank of America (BAC), are offering similar relief measures. Citigroup, Bank of America and Wells Fargo (WFC) have each announced donations of $1 million to disaster relief efforts. --Written by Shanthi Bharatwaj in New York
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