Military personnel get mortgage break

Freddie Mac's mortgage servicers must give more time to borrowers just released from active duty.
June 13, 2005: 1:13 PM EDT

NEW YORK (CNN/Money) - Freddie Mac said Monday it is requiring its 2,300 mortgage servicing companies to extend a break to borrowers recently back from active duty with the U.S. armed forces.

The company said the new policy was meant to help returning military personnel who face financial hardship avoid foreclosure.

"We're extending this forbearance to make sure that lenders do not initiate or resume foreclosure for at least 90 days from a borrower's release date," Ingrid Beckles, Freddie Mac's vice president of default asset management, said in a statement.

"This change gives lenders more time to work with servicemen and women and explore all relief options available," she said.

If a returning member of the military needs additional mortgage assistance, the new policy stipulates that a mortgage servicer will assess the borrower's individual circumstances to determine the most suitable relief option.

The new policy appears in a June 10 update to Freddie Mac's Single-Family Seller/Servicer Guide.

The company said this move goes above and beyond the requirements of the Service Members Civil Relief Act (SCRA), which protects servicemen and women from creditors only when they are on active duty.