Both Fannie Mae and Freddie Mac are offering relief to the thousands of homeowners affected by the devastating floods in South Carolina.
Over the last several days, torrential downpours have battered some residents in South Carolina with more than two feet of rain, resulting in as many as 14 deaths and damage currently estimated to be more than $1 billion.
Fannie Mae and Freddie Mac both announced Tuesday that the companies are extending disaster relief to all affected homeowners in the state via their mortgage servicers.
Under Fannie Mae’s disaster relief 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 their mortgage.
"We understand the disruption a natural disaster can have on people’s lives and we expect servicers to offer help to those who have been affected," said Malloy Evans, vice president of credit portfolio management at Fannie Mae.
"We want to ensure servicers have the resources and information to move quickly in providing assistance to homeowners in South Carolina,” Evans said. “Our thoughts and prayers are with all of those who have been impacted."
Fannie Mae notes that it expects its servicers to make contact with potentially affected homeowners within 90 days, but notes that establishing contact with homeowners in that situation may be difficult.
This video on Twitter shows how calamitous the situation is.
As a result, Fannie Mae said it allows servicers to grant temporary relief even if they cannot contact the impacted homeowner immediately.
Upon establishing contact with a homeowner, the servicer may offer forbearance for six months, which may be extended for an additional six months, for those homeowners that were current or ninety days or less delinquent when the disaster occurred.
Additionally, Fannie Moe noted that lenders who are originating loans that will be sold to Fannie Mae must verify the condition of the property if it is in the area affected by flooding.
Freddie Mac also offers various relief options for affected borrowers.
Freddie Mac mortgage relief options for affected borrowers in disaster-affected areas include suspending foreclosures by providing forbearance for up to 12 months; waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
Freddie Mac also reminds its 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.
"Freddie Mac strongly encourages South Carolinians whose homes or businesses were harmed by Hurricane Joaquin's torrential downpours to call their mortgage servicer as soon as possible,” said Yvette Gilmore, vice president of single-family servicer performance management at Freddie Mac.
“If their mortgage is owned or guaranteed by Freddie Mac they may qualify for our full range of mortgage relief options,” Gilmore said. “These options include forbearance on mortgage payments for up to one year."
Indeed, entire neighborhoods are currently flooded.