Mortgage Relief Options After Hurricane Ida – Forbes Advisor
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Hurricane Ida was one of the most destructive hurricanes to hit the United States in recent memory. The recovery will likely take weeks or more depending on the region, as the deadly storm swept through several states from Louisiana to New England, leaving people without power, water and homes.
In the parish of Lafourche, for example, one of the hardest-hit areas of Louisiana, an estimated 75% of the structures were damaged or destroyed. CoreLogic, a data analytics company, estimates residential and commercial property losses in Louisiana, Mississippi and Alabama could be in the range of $ 27 billion to $ 40 billion. And Accuweather predicts up to $ 95 billion in damage nationwide, making it one of the costliest hurricanes in a decade.
For owners, the financial burden can be devastating. Many people face loss of property and exorbitant repair costs, which can range from flooding to structural damage. And some people have to pay off the mortgage while spending money on temporary living conditions.
If you are unable to pay your mortgage due to financial hardship from Hurricane Ida, you may be able to withhold payments (eg abstention) or be eligible for other assistance programs from your mortgage provider.
Steps for Homeowners Having Trouble Making Monthly Payments
Many mortgage lenders, as well as Fannie Mae and Freddie Mac, are offering assistance to homeowners affected by Hurricane Ida.
The first thing to do is to contact your mortgage service provider if you cannot make your regular monthly payments. Find out what options are available to you. The worst-case scenario is to avoid contacting your service provider and going into foreclosure.
If your property has been damaged, make sure you have your home insurance information handy to speed up the process when you call your lender.
Keep in mind that there are many federal assistance programs, from direct payments to finding temporary shelter, to the Federal Emergency Management Agency (FEMA) to residents of hard-hit areas.
Forbes Advisor has compiled a list of what some lenders and government sponsored companies (Fannie Mae and Freddie Mac) are doing to help clients. Even if your lender is not on this particular list, they may have assistance plans available to you upon request.
If you have a mortgage guaranteed by Fannie Mae, help is available for eligible homeowners whose property was damaged by Hurricane Ida. According to Fannie Mae’s Guidelines for Mortgages for a Family Affected by Natural Disaster, homeowners have the following options:
- Mortgage agents can offer forbearance for up to 90 days for those affected by Ida. Repairers are allowed to automatically forbear customers (they think they’ve been affected by Ida), even if they haven’t spoken to the owner.
- Homeowners may be eligible to reduce or suspend their mortgage payments for up to 12 months.
- Foreclosure and other legal proceedings are suspended for a period of time, but you must contact your lender for more information.
- If you are already in a Covid-19 forbearance program, contact your lender to discuss the options.
Homeowners will not incur late fees or other penalties if they are enrolled in a disaster mortgage program. They might also be eligible for financial assistance to help them make up for missed payments.
“We urge all who are in the path of the storm to focus on their safety,” Cyndi Danko, vice president of risk management for individual families at Fannie Mae, said in a statement. “Fannie Mae is committed to making sure help is available to homeowners and tenants in need, and we encourage residents affected by this storm to seek help as soon as possible. “
If you are unsure if Fannie Mae is supporting your house, you can go to their website and use her mortgage finder.
Freddie Mac offers much the same assistance as Fannie Mae with the home loans she supports. According to its Disaster Policy, there are several avenues that eligible borrowers can take to get help.
- Short-term abstention plans are available for people in affected communities whose homes were damaged by Hurricane Ida. Mortgage services can determine eligibility by “assessing the extent of the property damage and the financial impact on the borrower.”
- Borrowers will be exempt from late fees. And any late payments will not be reported to the credit bureaus if they are part of a forbearance plan, trial period plan (which is a pre-loan modification plan) or a repayment plan.
- Some borrowers may be eligible for transition assistance that can help them resume regular payments after the forbearance period has expired.
To find out if Freddie Mac owns your mortgage, you can use the loan finder on its website.
Customers eligible for Chase mortgages in FEMA declared areas will not have to pay late fees for mortgages, credit cards, business banking, auto loans, and leases. If you incur late fees, Chase will refund the money to you. This policy is in place until September 26.
For borrowers in FEMA-declared disaster areas, Freedom Mortgage can:
- Offer a short-term forbearance plan, which will temporarily reduce or suspend payments. Once the forbearance has expired, there are various options for repaying the amount owed.
- Forgive late mortgage payment fees.
- Suspend adverse credit bureau reports.
- Temporarily suspend the “phone verification fee” so borrowers can pay, but this is the most convenient.
- Suspend active foreclosure or the initiation of a new foreclosure on your home.
Ally at home
Glenn Brunker, president of Ally Home, said Ally was “committed to doing what we can for those affected by this storm.” This includes offering borrowers a variety of relief options such as:
- Personalized rescue assistance via third-party providers
- Suspend the collection activity
- Closures and inspections can be delayed and your rate lockdown extended if you are already in the mortgage application process.
- Borrowers Can Get 30 Day Late Fee Waiver Specifically For Ally Lending Home Improvement Loans
- Collection activity will be suspended for those benefiting from the Ally Lending home improvement loan
Fifth Third Bank
Fifth Third Bank mortgage clients affected by Hurricane Ida can take advantage of the following disaster assistance options:
- Mortgage forbearance for 90 days from the date of the FEMA declaration. This will temporarily suspend your payments and any missed or reduced payments will not be reported to the credit bureaus during those 90 days. However, interest will continue to run.
- Late fees are waived for 90 days from the date of the FEMA return.
For borrowers who opt for a forbearance plan, there are several ways to repay the amount owed after the 90-day forbearance has expired:
- Make a lump sum payment to bring the loan up to date.
- Extend the forbearance period. Borrowers can extend their forbearance with another deferred payment period of three months. Abstention can be granted for three months at a time, up to a total of 12 months. However, certain fees may be charged for any forbearance extension beyond the initial 90-day period.
- Home loan modification, which will change either the term, rate, or principal amount of your loan to make it more affordable, is also available to some borrowers.
LoanDepot customers may be eligible for a forbearance plan, which will reduce or suspend your payments if you have been affected by Hurricane Ida.
TD Bank will help mortgage clients facing financial difficulties as a result of Hurricane Ida. Assistance is available upon request, according to a TD Bank spokesperson, and may include reimbursement of late payment fees and the temporary waiver of late payment fees.
Flagstar Bank is offering forbearance to those affected by Hurricane Ida if they are unable to make mortgage payments. Even borrowers who are or were previously on forbearance due to Covid-19 are eligible to extend their forbearance based on certain guidelines.