Fannie Mae is offering mortgage relief for borrowers in Mississippi, Louisiana, Alabama, Florida and other states facing hardships from damage caused by Hurricane Katrina, the mortgage giant announced Monday.
With Fannie Mae’s disaster relief provisions, lenders can help borrowers in several ways. These include 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, Fannie Mae said in a statement.
“What matters most to hurricane victims in those first few days after a storm hits is basic safety and survival, not concerns about making their next mortgage payment,” said Pam Johnson, senior vice president and single family credit officer at Fannie Mae.
“Fannie Mae has made changes to its insurance requirements that will ease the process for lenders and, more importantly, provide homeowners with much-needed relief,” Johnson said.
Fannie Mae’s business guidelines advise lenders to counsel borrowers on all possible mortgage payment workout options, and to inform homeowners of disaster relief available from federal agencies, the mortgage giant said.
Payment relief is available for single-family mortgages, including condos, serviced by Fannie Mae lenders in areas affected by the hurricane. Holders of Fannie Mae mortgage securities will be paid as usual during the relief period.
Mortgage lenders doing business with Fannie Mae will, according to Fannie Mae’s guidelines, determine appropriate relief steps by considering:
- Any uninsured losses;
- Extended unemployment; and
- Extraordinary expenses related to the storms that affect a homeowner’s ability to make his/her mortgage payments.
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