Fannie Mae is acting to ease the burden facing homeowners in the path of Hurricane Sandy through an expanded package of options for new and existing mortgages.
“Since 2009, Fannie Mae has responded to the credit crisis by providing approximately $3 trillion in liquidity to the mortgage market so that millions of Americans can buy homes, refinance their loans or rent affordable housing. In that time, we’ve helped approximately 1.3 million struggling borrowers avoid foreclosure,” says Timothy J. Mayopoulos, president and CEO of Fannie Mae. “Now, we’re responding to another crisis by making sure that homeowners have options to manage their housing challenges in the aftermath of Hurricane Sandy. We want families to know that we are here to help them.”
Servicers may immediately grant a borrower who has been affected by Sandy relief for 90 days in order to determine the facts of their situation. Early next week, Fannie Mae will issue guidance to servicers to expand the options they can offer to homeowners. For any homeowner who has suffered damage to their home or experienced a disruption in income as a result of Hurricane Sandy, servicers are authorized to take the following measures:
• Extend forbearance for up to 12 months, where appropriate;
• Provide loan modifications, once the homeowner is able to resume monthly mortgage payments;
• Waive any late payment charges;
• Suspend credit reporting for any homeowner for whom relief is granted; and
• Delay the initiation of any foreclosure action to determine the condition of the property and the borrower’s employment and income status.
Fannie Mae is implementing a 90-day foreclosure sale suspension and a 90-day eviction suspension for properties located within FEMA designated disaster areas eligible for individual assistance (those areas can be found at http://www.fema.gov/disasters).
Additionally, Fannie Mae is adjusting its guidelines for disbursements of insurance proceeds to ensure that homes damaged by Sandy can be repaired more quickly.
Furthermore, Fannie Mae is taking steps to facilitate completion of mortgage loans that were in process when Sandy hit by accepting documents and maintaining pricing that were in place at the time of the storm. Underwriting and property valuation documents will now be valid for 180 days in areas affected by the storm. Underwriting documents, such as credit reports and income verification, are typically valid for 90 days. Property valuation documents, such as appraisals or DU Refi Plus™ field work waivers for HARP refinances, are typically valid for 120 days. Property valuations for short sales delayed due to Hurricane Sandy will be valid for 180 days instead of the usual 90 days.