Fannie Mae will extend the same mortgage relief provisions in place for borrowers facing hardship as a result of Hurricane Katrina to those in areas impacted by Hurricane Rita, the mortgage giant announced late Monday.

The government-sponsored enterprise also announced a special employee volunteer policy to help the victims of the hurricanes in the Gulf Region.

With Fannie Mae’s disaster relief provisions, lenders make individual case-by-case evaluations as to the appropriate relief measures needed and can help borrowers in several ways, Fannie Mae said.

These ways 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 designed to meet the individual needs of borrowers, the company said.

“The gulf coast has been hit very hard by these two storms and homeowners in these areas will need assistance and flexibility as they face difficult and uncertain financial circumstances,” said Donald M. Remy, the Fannie Mae senior vice president and New Orleans native who is coordinating the company’s response to the disaster.

Fannie Mae’s business guidelines advise lenders to counsel borrowers on all possible mortgage payment work-out options, and to inform homeowners of disaster relief available from federal agencies.

Payment relief is available for single-family mortgages (including condominiums) serviced by Fannie Mae lenders in areas affected by the hurricanes, the company said.  Holders of Fannie Mae mortgage securities will be paid as usual during the relief period, the mortgage giant said.

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 their mortgage payments.

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, Fannie Mae said.

If the servicer has any doubt about the effect of the disaster on the condition of a property or the borrower’s employment or income status, it should refrain from taking adverse action against the borrower until it can determine the true status, Fannie Mae said.

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