With nearly a quarter million people still displaced by Hurricane Katrina in New Orleans alone, Freddie Mac is extending many emergency hurricane relief policies that were scheduled to expire on May Day.

Responsible for making possible one in six home purchases and homes for four million renters, Freddie Mac is also easing underwriting standards to help promote housing recovery in some Gulf Coast communities.

In a May 1 Bulletin to mortgage sellers and servicers, Freddie Mac explains the extended relief applies only to federally designated disaster areas where Federal Emergency Management Agency (FEMA) individual assistance is available.

Also, Freddie Mac designates relief to Gulf Coast communities based on the degree of storm damage -- Zone One counties have minimal damage; Zone Two, moderate damage; Zone Three, severe damage. A list of which communities are in which zone are available in the bulletin.

Relief, due to expire May 1, but now extended until August 31, 2006 includes:

• Every zone gets an extension on a ban on reporting to credit bureaus borrowers with storm related forbearance or repayment plans to credit bureaus. The ban comes with a streamlined loan modification process service designed to expedite workouts to help storm victims avoid foreclosure.

• Lenders must continue to obtain Freddie Mac's prior approval before initiating property preservation activities in Zones Two and Three, other than decisions to access abandoned property for insurance claims.

• Servicers are still encouraged to extend to borrowers, on a case-by-case basis in every zone, a wide range of mortgage relief, including forbearance for up to one year from the date of the disaster. Mortgage relief options are described in "Owning and Keeping a Home". The options are available to anyone facing economic hardship, but the special relief policies applies only to designated households affected by hurricanes.

• Mortgages secured by Zone One single-family properties are eligible for low down payment mortgages with a maximum loan-to-value ratio (LTV) of 100 percent. The previous maximum was 95 percent. The Bulletin also removes special collateral requirements for undamaged properties in Zone One.

"The May 1 Bulletin continues to give servicers the authority to extend relief to borrowers with properties in the worst disaster areas, while recognizing that there are now more Gulf Coast counties and parishes with the economic strength to justify a return to pre-Katrina business operations," said Janet Eakes, senior vice president of Freddie Mac's operations division.

Since Hurricane Katrina, qualified disaster area residents have received tax relief and tax return help, temporary housing help and credit assistance, as well as mortgage relief, among a host of housing-based or housing-related assistance.

Published: May 5, 2006

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.