Mortgage Help After A Natural Disaster
Like most residents of the Miami Valley, I was devastated to hear about our recent tornadoes. If you home is in an affected area, here are some things you should discuss with your mortgage company.
No matter what your situation, the first step should be to register with FEMA by clicking here or by calling 800-621-3362 and then call your insurance company.
You should call your mortgage company as soon as possible to discuss your options. You will need to have your FEMA claim number handy when you call.
Here are some specific guidelines that are put out by the various agencies regarding natural disasters.
VA Mortgage Loans
The VA will put out a ruling, called a circular, during a period of natural disasters. Although the one for Dayton and surrounding areas is not complete yet, here is a link to one that was put out during the Alabama storms.
It offers 5 parts:
Forbearance (skipping a mortgage payment for a period of time)
"VA encourages holders of guaranteed loans to extend forbearance to borrowers in distress as a result of the disaster. Careful counseling with borrowers should help determine whether their difficulties are related to this disaster, or whether they stem from other sources that must be addressed."
"Although the loan holder is ultimately responsible for determining when to initiate foreclosure, and for completing termination action, VA has requested on its website (https://www.benefits.va.gov/homeloans) that holders establish a 90-day moratorium from the date of a disaster declaration on initiating new foreclosures on loans affected by major disasters"
Late Charge Waivers
VA believes that many servicers plan to waive late charges on affected loans, and encourages all servicers to adopt such a policy for any loans that may have been affected.
In order to avoid damaging credit records of Veteran borrowers, servicers are encouraged to suspend credit bureau reporting on affected loans. VA will not penalize affected servicers for any late default reporting to VA as a result. Please contact the appropriate Regional Loan Center with any questions.
Activation of National Guard
Members of the National Guard may be called to active duty to assist in recovery efforts. VA encourages servicers to extend special forbearance to National Guard members who experience financial difficulties as a result of their service.
Fannie Mae Mortgage Loans
Fannie Mae has the following information on their disaster recovery website located here:
"If Fannie Mae owns your loan, your mortgage servicer or our Disaster Response Network can help with options including:
- A forbearance to temporarily suspend or reduce payments for up to 12 months
- No late charges or reporting of missed payments to credit bureaus while payments are suspended
- A loan modification to avoid a burdensome repayment or higher monthly payments after a forbearance
- Possible suspension of legal proceedings (i.e., foreclosure)"
Fannie Mae also offers the Disaster Response Network. From Fannie Mae:
"Our Disaster Response Network (operated by Project Porchlight) offers free, personalized help for homeowners with a Fannie Mae-owned loan whose property is in a FEMA-declared zone. A HUD-approved housing counselor will provide assistance by phone including:
- A comprehensive post-disaster assessment and action plan
- Assistance in filing FEMA, insurance, and Small Business Administration (SBA) claims
- Help working with your mortgage servicer on payment relief options
- Access to Project Porchlight Online, a website providing helpful tools and resources
- Ongoing counselor check-ins to help ensure a successful recovery
To see if Fannie Mae owns your loan, and to access contact information for the Disaster Response Network, visit our Loan Lookup tool"
Freddie Mac Mortgage Loans
Freddie Mac has similar language on their website here:
"In Major Disaster Areas, including those impacted by recent hurricanes and wildfires, where federal Individual Assistance programs have been extended, your mortgage company is authorized to:
- Suspend mortgage payments for up to 12 months.
- Waive assessments of penalties or late fees.
- Suspend reporting mortgage loan delinquencies to the nation's credit bureaus.
Homeowners suffering from hardships unrelated to these recent disasters may be eligible for Freddie Mac's standard relief options such as suspending mortgage payments or a mortgage modification. It's important to contact your mortgage company as soon as possible to discuss your situation and explore your options."
FHA Mortgage Loans
FHA offers similar guidance on their website:
"If you are current, you should continue to make your mortgage payment whenever possible. If, however, you are unable to pay your loan as a result of the disaster, your lender may waive any late fees normally charged and let you know about other options. Also, if you foresee ongoing problems in making your mortgage payments resulting from changes in your financial status, you should contact your lender immediately."
It also says:
"If you are at risk of losing your home because of the disaster, your lender may stop or delay initiation of foreclosure for 90 days. Lenders may also waive late fees for borrowers who may become delinquent on their loans as a result of the disaster."
USDA Mortgage Loans
For USDA loans also known as RD loans or Rural Development loans, USDA has the following guidance available here.
- "Moratorium. If you have excessive, non-reimbursed expenses resulting from damage to your property, non-reimbursed medical expenses, or have lost your job as a result of the disaster, you may be eligible for a moratorium for up to 180 days where you are not required to make your house payment.
- Insured Losses. If your property is damaged, please contact us to obtain a claims package that will explain how to work with your insurance agency and RD to process your claim.
- Payment Assistance. If your income has been reduced by more than 10% and will be for the foreseeable future, you may be eligible for payment assistance or an increase in the assistance that you currently receive.
To request loan servicing assistance, contact the Customer Service Center (CSC) at (800) 414-1226 or TDD (800) 438-1832 Monday through Friday, 7:00 A.M. to 5:00 P.M. Central Time. Email inquiries: email@example.com.
Do not hesitate to contact your local RD State Office by email or telephone if you have questions."
Home Rebuilding and Renovation Programs
There are several mortgage options available to you if you need to rebuild, repair the current home, or buy another home. Please reach out if you want more info about our renovation loan programs.
As you can see, if your home was affected by recent storms, you have a lot of options. I hope these tips help and if you have any questions, please do not hesitate to reach out to me at 937-572-3713 or by clicking here.