Fannie Mae and Freddie Mac have issued reminders to its mortgage servicers that concern borrowers in the Gulf Coast area whose homes may have been affected by Hurricane Harvey, noting that various types of forbearance can or should be extended to these homeowners.
Under Fannie Mae’s guidelines, a servicer may temporarily suspend or reduce a homeowner’s mortgage payments for up to 90 days if the servicer believes a natural disaster has adversely affected the value or habitability of the property or if the natural disaster has temporarily impacted the homeowner’s ability to make payments on the mortgage. If a servicer establishes contact with a homeowner, the servicer may offer forbearance for up to six months, which may be extended for an additional six months, for those homeowners that were current or 90 days or less delinquent when the disaster occurred.
Fannie Mae guidelines also authorize servicers to delay foreclosure sales and other legal proceedings in these areas.
Freddie Mac’s guidelines are similar and include waiving assessments of penalties or late fees against borrowers with disaster-damaged homes, suspending foreclosures by providing forbearance for up to 12 months, and not reporting forbearance or delinquencies caused by the disaster to the nation’s credit bureaus.
Freddie Mac also reminds servicers to consider borrowers who work in eligible disaster areas but have homes in unaffected areas for Freddie Mac’s standard relief policies, which include forbearance or mortgage modifications.