Freddie Mac adjusted procedures for dealing with insurance proceeds for borrowers impacted by Hurricane Sandy.
The GSE changed its process for helping servicers deliver insurance proceeds to borrowers who need to fix homes secured by the GSE.
Freddie’s goal is to simplify, as well as clarify, policies so servicers can put insurance proceeds to work by helping families repair their homes without delay.
“Today’s Guide Bulletin re-emphasizes Freddie Mac’s commitment to do everything it can to get insurance money into the hands of eligible borrowers recovering from Hurricane Sandy as quickly as possible,” said Tracy Mooney, senior vice president of single-family servicing and real-estate owned for Freddie Mac.
A bulletin put out by Freddie Mac gives servicers discretion on the time and amount of insurance proceeds to release to eligible homeowners, the GSE said.
The bulletin also stipulates that servicers now have the authority to provide eligible homeowners with funds for repairs and restoration either as a single payment or as a series of payments, the GSE noted.
In exercising discretion, servicers were told to apply the same policies as well as processes in order to provide borrowers repairing their homes with “clarity and consistency.”
Additionally, Freddie Mac also informed servicers that they are already authorized to release insurance proceeds up to the greater of $40,000, or 10%, of the unpaid principal balance if the home was totally or almost completely destroyed by Hurricane Sandy.
The bulletin also emphasizes that servicers should not delay the release of insurance proceeds to eligible borrowers for loss of contents or if they were displaced by the storm.
Freddie Mac’s disaster relief policies apply to all of the GSE’s borrowers with primary residences, second homes or investment properties in declared major disaster areas where federal assistance programs are available.
