The mortgage-backing government entities announced that they will offer mortgage forbearance for at least 90 days to borrowers in the Houston area affected by Hurricane Harvey. In some cases, this could be extended for up to a year.
Storm victims with Fannie Mae, Freddie Mac, and Federal Housing Administration–backed loans will not have to make their monthly payments. They will face no penalty fees. Interest on their loans, however, would still accrue.
At least $23 billion worth of property has been affected by record-level flooding from Hurricane Harvey in parts of Texas’ Harris and Galveston counties alone,
according to a Reuters analysis.
Freddie Mac announced on Tuesday that it was suspending evictions and foreclosures on homes with mortgages that it owns or guarantees in disaster areas impacted by Hurricane Harvey. Fannie Mae issued a similar statement.
“We’re committed to ensuring that homeowners receive the mortgage assistance they need to overcome the devastating tragedy of Hurricane Harvey,” Yvette Gilmore, Freddie Mac’s vice president of single-family servicer performance management, said in a statement. "Once they’re out of harm’s way, homeowners should contact their servicers—the company to which they send their monthly mortgage payments. They may be eligible for forbearance on mortgage payments for up to one year if their mortgage is owned or guaranteed by Freddie Mac.”
In the Houston area and nearby areas, there are more than twice as many mortgage properties with nearly four times the unpaid principal balance as there were in the Louisiana and Mississippi counties hit by Hurricane Katrina in 2005, Mortgage News Daily reports. Black Knight Financial Services estimates more than 75,000 borrowers in Houston may be unable to make a mortgage payment within the next two months.
“This is an unprecedented crisis in the region as it relates to housing,” says Dave Stevens, CEO of the Mortgage Bankers Association. “We are not even at the point where we can evaluate the total costs, walkaways, insurance coverage, homes uninsured, jobs lost, not being able to make your mortgage payments.”
Source: “Harvey Hits Mortgages: Flood-Stricken Homeowners Less Likely to Pay,” Mortgage News Daily (Aug. 30, 2017)
