Dennis Norman
Last week both Fannie Mae and Freddie Mac announced relief for homeowners with a mortgage insured by either agency (which accounts for over 90 percent of the home loans in the U.S.) that either have drywall problems (the Chinese drywall issue) or are in the Gulf coast area and are affected by the oil spill.
Drywall Issues:
A Federal study found a strong connection existed between some types of drywall and foul odors and metal corrosion in homes including electrical wiring, appliances and heating and air conditioning systems. This was the result of defective drywall imported in large quantities and used by some home-builders and contractors after the Gulf Coast hurricanes in 2005.
The Relief:
Fannie Mae-
- Fannie Mae is instructing their servicers to offer, on a case-by-case basis, to borrowers affected by problem drywall, up to six-months forbearance on their mortgage loan payments.
- Lenders will require a property inspection to confirm the existence of of the problem drywall.
Freddie Mac-
- Freddie Mac is instructing their servicers to offer, on a case-by-case basis, to borrowers affected by the Gulf Oil spill a suspension of the borrowers house payments for up to 90 days or a reduction of their payments for up to six months. In addition, servicers may recommend forbearance for up to twelve months based upon the borrowers individual circumstances.
Gulf-Coat Oil Spill Issues:
The Deepwater Horizon oil spill has affected thousands of homeowners either through damage to their property or had a negative affect on their income as a result of the spill.
The Relief:
Fannie Mae-
- Fannie Mae is instructing their servicers to offer, on a case-by-case basis, to borrowers affected by the Gulf Oil spill a suspension of, or reduction of, the borrowers house payments for up to 90 days.
- During the relief period lenders will determine the nature and extent of the impact the Gulf Oil spill has had on the condition of the borrower’s property and/or financial condition and then may offer additional alternatives if warranted, including an extension of the mortgage payment relief for up to an additional 90 days.
Freddie Mac-
- Freddie Mac is instructing their servicers to offer, on a case-by-case basis, to borrowers affected by problem drywall a suspension of the borrowers house payments for up to 90 days or a reduction of their payments for up to six months. In addition, servicers may recommend forbearance for up to twelve months based upon the borrowers individual circumstances.
Fannie-Mae’s plan is scheduled to go into effect in mid-July and I’m not sure about Freddie Mac, it may be in effect already. If you are a homeowner affected by one of these two issues and wish to seek relief you should contact your lender right away and inform them of your situation.
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