At least eight people have died and more than 40,000 homes have been damaged in the recent Lousiana floods. Now, Fannie Mae is reminding mortgage servicers that they have the ability to help customers affected by the disaster.
On or about 8/16/2016, about two feet of rain was dumped on the southern part of the state, according to an Associated Press report. Some residents even had to use boats to get back into their houses.
Obviously, the damage can present crushing financial problems for homeowners. Consequently, Fannie Mae is reminding servicers that under its guidelines for single-family mortgages, they have the ability to grant an initial period of mortgage forbearance to borrowers affected by the disaster. Additional forbearance is available with approval from Fannie Mae, and Fannie’s guidelines also authorize servicers to delay foreclosure sales and other legal proceedings in flood-affected areas.
“We know that many people have had their lives disrupted by the flooding in Louisiana,” said Malloy Evans, Fannie Mae vice president of servicing. “Our servicers are committed to helping homeowners affected by natural disasters and we are grateful for their efforts to offer the appropriate assistance to families in need. our thoughts are with all of those who have been impacted.”
Fannie’s guidelines allow a servicer to temporarily suspend or reduce a homeowner’s mortgage payments for up to 90 days in the event a disaster has “adversely affected the value or habitability of the property,” or if the disaster has temporarily impacted the borrower’s ability to make their mortgage payments, according to a news release. And since disasters can make reaching homeowners difficult, the guidelines allow servicers to extend temporary relief even if they can’t contact impacted homeowners right away.
If a servicer establishes contact with a homeowner, the servicer can offer forbearance for up to six months, according to the release. That may be extended for an additional six months for homeowners who were current or delinquent 90 days or fewer when the disaster occurred.