Fannie Suspends Some Mortgage Payments in Oil Spill Wake
Fannie Mae ($0.00 0%) today authorized its servicers to immediately suspend or reduce mortgage payments for borrowers whose properties or income are negatively impacted by the ongoing crude oil spill off the Gulf of Mexico.
"We want to give homeowners every opportunity to weather this unprecedented disaster, including relief from their mortgage payment if that will help them get back on their feet and stay in their homes," said Fannie president and CEO Michael Williams, in a statement. "Our policy is in place to support those who are experiencing a disaster-related hardship through no fault of their own and are acting in good faith to meet their mortgage obligation."
Servicers may suspend or reduce a borrower's payments for up to 90 days under the Fannie "Special Relief Measures" policy. While payments are suspended, the servicer can determine the nature and extent of the impact the disaster is having on the condition of the property or on the borrower's financial condition.
Once that assessment is complete, servicers can evaluate the appropriate loss mitigation alternative based on a case-by-case determination, including an additional three months of forbearance, a loan modification or other customized solution.
Write to Diana Golobay.
Disclosure: the author holds no relevant investments.
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