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Cuomo Announces Special Program for Sandy Victims

Fannie Mae and Freddie Mac are offering a relief program to victims of Superstorm Sandy who were current on their mortgage before the storm, ""Governor Andrew M. Cuomo"":https://www.governor.ny.gov/ of New York announced in a release Thursday.

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According to the release, the program is in response to letters the New York State Department of Financial Services (DFS) ""sent"":http://dsnews.comarticles/cuomo-urges-greater-flexibility-on-payment-plans-for-sandy-victims-2013-04-15 in April, which urged for a change in what Cuomo's administration called ""restrictive"" guidelines that could lead to a spike in mortgage payments for Sandy victims.
The letters were addressed to the CEOs at Fannie Mae and Freddie Mac, as well as their regulator, the Federal Housing Finance Agency.

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""In response, FHFA, Fannie Mae, and Freddie Mac have communicated to DFS that a special mortgage relief program will be available to Sandy victims with Fannie or Freddie mortgages who were current on their mortgage payments before the storm,"" Cuomo's office stated.

The GSEs have offered various forms of relief to Sandy victims, including extensions on forbearance plans for up to 12 months and the suspension of eviction proceedings and foreclosure sales for 90 days.

However, DFS voiced concern that Sandy victims who receive forbearance on their mortgage payments could face an immediate balloon payment afterwards or see a spike in their monthly mortgage payments.

As part of the new program, Cuomo's administration explained program participants who received forbearance from the GSEs will be eligible for a program that allows homeowners to lower their monthly payments and avoid payment spikes.

Other examples of provisions the program allows include a lowered interest rate to as low as 4 percent, an extension of the mortgage term, and additional forbearance for homeowners who are severely underwater on their mortgages.

""I applaud Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency for acting swiftly and unveiling this new program to protect Sandy victims from sudden mortgage payment spikes,"" said Cuomo. ""Delivering this additional relief is vital to helping ensure Sandy victims can continue to rebuild and recover in the wake of this terribly damaging storm.""

About Author: Esther Cho

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