Fannie/Freddie Invoke Disaster Policies in Wake of Hurricane Lane

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The rain is
still pouring down in Oahu, but Fannie Mae and Freddie Mac are ahead of the game.  Both GSEs have already announced that their
disaster relief programs are in effect
for those impacted by Hurricane Lane.

Assistance is available for borrowers
with GSE related mortgages on homes in presidentially-declared disaster areas
where the Federal Emergency Management Agency (FEMA) has made individual
assistance programs available.  We would
assume in this case that would be everyone in Hawaii, but where that type of
FEMA assistance is not available, servicers are advised they can leverage
short-term forbearance programs to provide immediate assistance to affected
borrowers.

The relief available from the GSEs
includes:


  • Forbearance from making mortgage
    payments for up to 12 months.

  • Waived late fees during the
    forbearance period.

  • Delinquencies and forbearance will
    not be reported to credit bureaus.

  • Servicers are authorized to suspend
    or reduce mortgage payments for up to 90 days
    if they have reason to believe
    the homeowner is affected even without contact from the borrower. The 12 months forbearance will still be available. Servicers must suspend foreclosures and other
    legal proceedings for those who are or might be impacted, again with or without
    borrower contact.

  • Disaster relief may also be
    available to persons living outside of the affected areas if their place of
    employment has been affected.

“It is important for those in the
path of the storm to focus on their safety as they deal with the potential
impact of Hurricane Lane,” said Carlos Perez, Senior Vice President and Chief
Credit Officer at Fannie Mae. “Fannie Mae and our lending and servicing
partners are focused on ensuring assistance is offered to individuals and
families in need. We urge everyone in the area to be safe, and we encourage
homeowners affected by the storm to contact their mortgage servicer for
assistance as soon as possible.”



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