Mortgage Assistance in Times of a Natural Disaster
In the midst of a natural disaster paying your mortgage is not top of mind. Those who are fighting to survive in flood stricken areas in the aftermath of Hurricane Harvey are more concerned with knowing if their homes will be habitable once flood waters recede or if their homes will be total losses.
And now residents in Florida are focused on surviving and looking for a place to stay, not giving a moment’s thought to paying their monthly mortgage or other bills.
Fannie Mae, Freddie Mac and the Federal Housing Administration, announced that they will offer forbearance for at least 90 days to borrowers. Specifically in the Houston some homeowners could receive, an extension of up to a year. (It’s still too soon to forecast the outcome of Hurricane Irma in Florida.)
The assistance would mean that borrowers can pause their monthly payments, and will not be charged a penalty fee; interest would still accrue.
Freddie Mac announced on Tuesday that it was suspending evictions and foreclosures on homes with mortgages that it owns or guarantees in disaster areas impacted by Hurricane Harvey.
“We’re committed to ensuring that homeowners receive the mortgage assistance they need to overcome the devastating tragedy of Hurricane Harvey,” Yvette Gilmore, Freddie Mac’s vice president of single-family servicer performance management, said in a statement, “Once they’re out of harm’s way, homeowners should contact their servicers—the company to which they send their monthly mortgage payments. They may be eligible for forbearance on mortgage payments for up to one year if their mortgage is owned or guaranteed by Freddie Mac.”
Fannie Mae is also reminding homeowners of the options it provides saying, homeowners who suffer damage or displacement are encouraged to contact their servicers as soon as possible, or to call Fannie Mae directly at 1-800-2FANNIE. Servicers are authorized to suspend or reduce monthly payments for up to 90 days, with additional payment forbearance of up to 12 months in some circumstances. Servicers can provide this assistance even if they do not hear from homeowners if they suspect they have been affected.
Carlos Perez, Senior Vice President and Chief Credit Officer at Fannie Mae says, “Fannie Mae and our lending and servicing partners are focused on ensuring assistance is offered to individuals and families in need. We are monitoring the path of the storm and have provided our Single-Family lenders and servicers and our Multifamily DUS® lenders and borrowers with the tools and flexibility to assist impacted borrowers, renters, and communities.”
The FHA is also doing its part to assist. U.S. Housing and Urban Development Secretary, Ben Carson, announced “HUD will speed federal disaster assistance to the State of Texas and provide support to homeowners and low-income renters forced from their homes due to Hurricane Harvey.”
The President’s declaration allows HUD to offer mortgage/foreclosure relief and other assistance to certain families living in impacted counties.
Assisting the State of Texas and local governments in re-allocating existing federal resources toward disaster relief– HUD’s Community Development Block Grant (CDBG) and HOME programs give the State and communities the flexibility to redirect millions of dollars in annual formula funding to address critical needs, including housing and services for disaster victims. HUD is currently working with State and local officials to explore streamlining the Department’s CDBG and HOME programs in order to expedite the repair and replacement of damaged housing;
Immediate foreclosure relief– HUD is granting a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. There are approximately 200,000 FHA-insured homeowners living in these impacted counties;
Mortgage insurance available– HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. Borrowers from participating FHA-approved lenders may be eligible for 100 percent financing;
Insurance available for both mortgages and home rehabilitation– HUD’s Section 203(k) loan program enables those who have lost their homes to finance the purchase or refinance of a house along with its repair through a single mortgage. It also allows homeowners who have damaged houses to finance the rehabilitation of their existing single-family home; and
Offering Section 108 loan guarantee assistance– HUD will offer state and local governments federally guaranteed loans for housing rehabilitation, economic development and repair of public infrastructure.
Information on housing providers and HUD programs – The Department will share information with FEMA and the State on housing providers that may have available units in the impacted counties. This includes Public Housing Agencies and Multi-Family owners. The Department will also connect FEMA and the State to subject matter experts to provide information on HUD programs and providers.
Information provided in part by HUD.gov, FannieMae.com and FreddieMac.com
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