Fannie Mae is prepping servicers to handle the issues homeowners may face in the wake of severe flooding across Louisiana.
President Obama granted a federal disaster declaration for 29 of the state's 64 parishes. Roughly 20,000 people had to be rescued by emergency agencies across the state because of the flooding, Louisiana Gov. John Bel Edwards said, and it was responsible for nine deaths.
Fannie Mae's existing guidelines allow servicers to grant an initial period of forbearance to borrowers affected by natural disasters. Further forbearance can be obtained with Fannie Mae's approval.
Per the guidelines, mortgage payments can be temporarily suspended or reduced for up to 90 days if the servicer believes the property's value or habitability have been affected by the disaster. Servicers do not need to contact the borrower before providing this relief.
Extensions can be made for an additional six months if the homeowner were current or 90 or fewer days delinquent. Lenders must also verify the condition of properties if the loans will be sold to Fannie Mae.
"We know that many people have had their lives disrupted by the flooding in Louisiana," Malloy Evans, vice president of servicing at Fannie Mae, said in a news release. "Our servicers are committed to helping homeowners affected by natural disasters and we are grateful for their efforts to offer the appropriate assistance to families in need. Our thoughts are with all of those who have been impacted."
