Fannie Providing Payment Relief for Oil Spill Victims

Fannie Mae is telling its servicers that they may immediately suspend or reduce mortgage payments for borrowers whose properties or income are negatively impacted by the Gulf oil spill. Michael J. Williams, president and chief executive, said the policy is in place to support those who are experiencing a disaster-related hardship through no fault of their own and are acting in good faith to meet their mortgage obligation. Fannie Mae is allowing servicers to suspend or reduce a borrower's loan payment for up to 90 days. During that time, the servicer is to assess the impact the disaster is having on the condition of the property or on the borrower's financial condition. At the conclusion of that assessment, Fannie Mae said, servicers have additional flexibilities to evaluate the appropriate loss mitigation alternative based on a case-by-case determination, including an additional three months of forbearance, a loan modification or other customized solution. Freddie Mac did not return a request for comment on whether it had similar measures in place by press time. In related news, Citigroup said its CitiMortgage subsidiary is suspending foreclosure actions in the affected areas from the oil spill until Sept. 17. Borrowers with first mortgages owned by CitiMortgage who meet certain other criteria will not be subject to foreclosure sales or foreclosure notifications. While CitiMortgage does not own all of the loans it services, the company hopes to help as many borrowers as possible with this initiative. In addition, evictions on affected real estate-owned properties cease during this time. CitiMortgage borrowers occupying residences in ZIP codes within 25 miles of affected coastal areas will be eligible for the program.