Hurricane Sandy borrowers will have new Freddie Mac insurance procedures

By Sari R. Updated on 2/25/2013

Freddie Mac recently changed procedures that deal with insurance proceeds for borrowers who were impacted by Hurricane Sandy.  These changes deal with the process for helping servicers give insurance proceeds to borrowers who need to repair Freddie Mac secured homes. 

Freddie wants to simplify and clear up policies so that servicers can help families fix their homes with minimal delay.  Freddie Mac has stated that it is committed to placing insurance money in the hands of its borrowers who are trying to recover from Hurricane Sandy as fast as possible. 

The GSE has recently released a bulletin that provides servicers with the amount of insurance to give to eligible homeowners.  This bulletin also states that servicers can now give eligible homeowners repair and restoration funds as multiple payments or a single payment.

Servicers were told that they were able to release insurance proceeds of up to $40,000 or 10% of the unpaid principal if the home was completely destroyed by Hurricane Sandy.  Servicers were also told that the insurance proceed releases shouldn’t be delayed if the borrowers were displaced by the storm.

Freddie Mac’s disaster policies apply to all of its borrowers with second homes, investment properties or primary residences in declared disaster areas.

Click here for today's lowest mortgage rates.