WASHINGTON, Aug. 29 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM) has
mortgage relief provisions in place for borrowers in Mississippi, Louisiana,
Alabama, Florida and other states facing hardships as a result of widespread
damage caused by Hurricane Katrina.
With Fannie Mae's disaster relief provisions, lenders help borrowers in
several ways, including suspending mortgage payments for up to three months,
reducing the payments for up to 18 months, or in more severe cases, creating
longer loan payback plans. Such assistance is provided on a case-by-case
basis, and is designed to meet the individual needs of borrowers.
"What matters most to hurricane victims in those first few days after a
storm hits is basic safety and survival, not concerns about making their next
mortgage payment," said Pam Johnson, senior vice president and single family
credit officer at Fannie Mae. "Fannie Mae has made changes to its insurance
requirements that will ease the process for lenders and, more importantly,
provide homeowners with much-needed relief." Johnson also said that she
greatly appreciates the lenders who work with Fannie Mae and assist homeowners
with payment issues in the aftermath of a disaster.
Fannie Mae's business guidelines advise lenders to counsel borrowers on
all possible mortgage payment work-out options, and to inform homeowners of
disaster relief available from federal agencies. Payment relief is available
for single-family mortgages (including condos) serviced by Fannie Mae lenders
in areas affected by the hurricane. Holders of Fannie Mae mortgage securities
will be paid as usual during the relief period.
Mortgage lenders doing business with Fannie Mae will, according to Fannie
Mae's guidelines, determine appropriate relief steps by considering:
* any uninsured losses;
* extended unemployment; and
* extraordinary expenses related to the storms that affect a homeowner's
ability to make their mortgage payments.
Fannie Mae also recently announced that it has streamlined its procedures
for handling insurance proceeds to provide lenders with more discretion in
disbursing insurance proceeds. These improved procedures are based primarily
upon the status of the mortgage at the time of the disaster and the extent of
the damage. The new procedures are applicable for any federal or state
declared natural disaster and will enable lenders to work more effectively and
efficiently to address the needs of those borrowers who may require
assistance.
In addition, lenders are now required to temporarily discontinue reporting
delinquencies to credit bureaus if they are aware that the borrower's
delinquency is attributed to hardships as a result of a natural disaster.
For information on mortgage relief, homeowners who have experienced
hardships should contact the lender to whom they send their monthly mortgage
payment.
Fannie Mae is a New York Stock Exchange Company. It operates pursuant to a
federal charter. Fannie Mae has pledged through its American Dream Commitment
to expand access to homeownership for millions of first-time home buyers; help
raise the minority homeownership rate to 55 percent; make homeownership and
rental housing a success for millions of families at risk of losing their
homes; and expand the supply of affordable housing where it is needed most.
More information about Fannie Mae can be found on the Internet at
http://www.fanniemae.com.
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