Hurricane Sandy Means Frozen Loans, Reappraisals
Mortgage bankers funding loans in the Mid-Atlantic and Northeast can expect their originations to be on hold for awhile because of Hurricane Sandy, and properties being financed will need to be reappraised in the wake of storm damage, National Mortgage News reported Oct. 30.
David Stevens, president of the Mortgage Bankers Association, told National Mortgage News that he expected mortgage profits and origination volumes to dip for a short period because of days lost to the storm.
Business is expected to be interrupted the most in the New York/New Jersey/Long Island metro area.
Stevens anticipated that Fannie Mae and Freddie Mac will reopen its trading window within days and that the Federal Housing Administration and the U.S. Department of Veterans Affairs also will soon reopen.
Borrowers who already have a mortgage backed by Fannie or Freddie and whose homes were damaged by Hurricane Sandy can take advantage of the enterprises' disaster-relief policies. Freddie Mac allows forbearance on mortgage payments for up to one year while Fannie Mae allows borrowers forbearance for up to 90-days.
Preliminary estimates showed that storm damage could exceed $10 billion.