January 09, 2019
Standing Solutions for Victims of Hurricane Michael from Fannie Mae and Freddie Mac
When Hurricane Michael slammed into our Florida service area, the good people of this great state were subjected to the worst storm we have seen since 1851, when records of these sorts of events began. Florida, combined with the surrounding six states, suffered in the estimated ballpark of 57,000 home losses, amounting to what Moody’s figures at between $16 – $20 billion dollars.
Moreover, according to ClosingCorp, around 1,600 mortgage transactions pending at the time of landfall—worth around $400 million—were endangered by the storm.
But there is a rainbow at the end of this maelstrom. In addition to programs offered by FEMA that may bring some solace, our national mortgage-backed securities banks Fannie Mae and Freddie Mac were able to preemptively enact relief policies for loans in the days before the storm landed, since the zone was pre-declared a National Disaster Area by the President.
The policies put in place by Fannie Mae to help homeowners in need are: If a homeowner has been affected by the disaster, foreclosure and other proceedings can be suspended. Payments on the loan can be put in forebearance for up to 12 months, and in the case payments continue to be made but are late or delinquent, these defects won’t be reported for 12 months, so as to not wreck the borrower’s credit score. And, even if a borrower who has been affected by the disaster did not contact their servicer in the storm’s immediate aftermath, their mortgage payments could be reduced or suspended for up to 90 days.
And, likewise, those put in place by Freddie Mac: Should a homeowner affected by the disaster not have immediate relief access to FEMA funds, they might nonetheless be able to request Freddie Mac for forbearance of up to 12 months, including the suspension of foreclosures for that period. During that time, late fees and penalties may be waived for such disaster-damaged homes, and reporting of any delinquencies occurring as a result of the storm to credit bureaus may be delayed, so as to not adversely affect borrowers’ credit scores.
Meanwhile, the market continues to do business. At Topouzis & Associates, P.C., not only do we offer the services that ensure your title gets conveyed clear of defects, we supply purchasers with Owner’s Policies of title insurance. Contact us if you want your property transfer in Cranston, Rhode Island; Springfield, Massachusetts; or Panama City, Florida to go through without a hitch—both before and after closing.