Fannie & Freddie: Borrowers and Servicers Have Options as Natural Disasters Rage On
As the nation grapples with the effects of an ongoing pandemic, Mother Nature has shown little mercy as wildfires have been burning in parts of Northern California since last week and residents of the Gulf Coast face evacuation orders with Category 4 Hurricane Laura making its debut.
Last year, the National Oceanic and Atmospheric Administration said there were at least 14 natural disasters that resulted in losses exceeding $1 billion in the U.S.
A recent report from CoreLogic revealed that there are 431,810 single-family and multifamily homes at risk of damage from Hurricane Laura, representing approximately $88.3 billion that’s at risk.
For those battling wildfires in the Golden State, a report from Realtor.com revealed 17,000 homes are at risk with a total estimated value of $11.8 billion. The Santa Cruz-Watson metro is experiencing the greatest threat with 5,300 homes possibly affected, followed by the Vallejo-Fairfield area with a possible 3,800 homes.
As a reminder to those impacted, Fannie Mae and Freddie Mac released information Wednesday regarding mortgage assistance options for borrowers effected by these and other natural disasters – including the 4.94% of GSE-backed mortgages that are in forbearance.
According to the GSEs, mortgage servicers are authorized to suspend or reduce a homeowner’s mortgage payments for up to 90 days – even without establishing contact – if the servicer believes the homeowner was affected.
Affected homeowners may also be eligible to reduce or suspend their mortgage payments for up to 12 months, during which they will not incur late fees. Foreclosure and other legal proceedings are suspended as well.
“Along with our lending and servicing partners, Fannie Mae is committed to ensuring assistance is available to homeowners and renters in need. We encourage residents whose homes, employment, or income are impacted by this storm and fires to seek available assistance as soon as possible,” said Malloy Evans, senior vice president and single-family chief credit officer for Fannie Mae.
Freddie Mac Single-Family disaster relief policies authorize mortgage servicers to help affected borrowers in eligible disaster areas — those federally declared Major Disaster Areas where federal individual assistance programs have been extended.
However, Freddie Mac also encouraged single-family servicers to consider homeowners who are impacted by the hurricane or wildfires, but who live or work outside of an eligible disaster area, for Freddie Mac’s standard relief policies.
“We are monitoring these situations, and we urge those in the path of the storm and fires to focus on their safety first as they prepare for the potential impact of these events,” Evans said.
Posted on housingwire.com on 8/26/2020.