Mortgage Relief for Disaster Victims
Since the majority of home mortgages in this country are underwritten by FannieMae or FreddieMac, both organizations have initiated the following relief for those whose homes are in the designated disaster areas:
Fannie Mae has mortgage relief provisions in place for borrowers in Mississippi, Louisiana, Alabama, Florida and other states facing hardships as a result of widespread damage caused by Hurricane Katrina.
With Fannie Mae’s disaster relief provisions, lenders help borrowers in several ways, including suspending mortgage payments for up to three months, reducing the payments for up to 18 months, or in more severe cases, creating longer loan payback plans. Such assistance is provided on a case-by-case basis, and is designed to meet the individual needs of borrowers.
In addition, lenders are now required to temporarily discontinue reporting delinquencies to credit bureaus if they are aware that the borrower’s delinquency is attributed to hardships as a result of a natural disaster.
Freddie Mac is strongly encouraging mortgage servicers to provide the following relief to borrowers with Freddie Mac-owned loans:
1. Waive the assessment of penalties or late fees against borrowers with homes damaged by wind, flooding, fire, etc. (collectively, a ‘disaster’);
2. Not report to credit bureaus forbearance or delinquencies resulting from a disaster;
3. Expedite the release of insurance proceeds.
Additional information will be posted as soon as it’s available! Our thoughts, concern and prayers are with all victims and their families!