Fannie Mae Disaster Relief

MAY be Offered at the Lenders Discretion per FNMA Disaster Relief NoticeFNMA announced on August 25, 2017 that they permit lenders to offer forbearance for between 90 to 180 days on property that value / marketability or habitability has been negatively affected by Hurricane Harvey. Similarly, owners whose ability to earn income due to the storm may be offered temporary reprieves.

Like all things GSE related, the devil is in the details. Hopefully this is going to be an exception with no hidden demons.

One concern I have is the use of the word ‘may’ as opposed to a more directive word such as ‘shall’. Apparently this is only an option that MAY be offered at the lenders discretion rather than a directive that would have the benefit of reducing unnecessary worry by those already hit by economic hardship beyond their own doing. I’d like to be wrong in my suspicions on this one. Hopefully I am.

Please pass the above link along to other media, appraisers, real estate agents and any loan broker contacts that you may have so that as many people as possible are informed about this policy. Kudos to FNMA for their limited publishing of the information.

On another matter, FNMA reminds lenders making (new) loans including refinance that they are required to verify the property condition (and presumably value and marketability – but that was less clear).

Apparently “Big Data” value analytics is incapable to dealing with such issues. Something that appraisers have been saying for a long time. Conditions affecting property can change all the time and over night. Any bets lenders will send untrained folks out to ‘verify’ property condition with little to no regard for any possible overall market decline?

Excerpt from Fannie Mae Reminds Homeowners and Servicers of Mortgage Assistance Options for Gulf Coast Area Impacted by Hurricane Harvey

Under Fannie Mae’s disaster relief guidelines, a servicer may temporarily suspend or reduce a homeowner’s mortgage payments for up to ninety 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. Since these events can make it difficult to reach homeowners, Fannie Mae allows servicers to grant this temporary relief even if they cannot contact the impacted homeowner immediately. If a servicer establishes contact with a homeowner, the servicer may offer forbearance for up to 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.

Michael Ford
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Image credit flickr - Texas Military Department
Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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Fannie Mae Disaster Relief

by Michael Ford time to read: 2 min