Fannie Unveils New Disaster Relief Flexibility

Fannie Mae has announced new disaster relief flexibility that will allow lenders to base single-family underwriting decisions on a hurricane victim's pre-hurricane credit history.The policy will enable lenders, under certain conditions, to disregard obligations on previously owner-occupied homes when calculating a hurricane victim's debt-to-income ratio, Fannie Mae said. The flexibility will be allowed if: the previous residence is heavily damaged or destroyed and unlikely to be repaired; the lender obtains a property inspection confirming the status of the previous residence; and the borrower demonstrates that he or she is working with the servicer to address the prior mortgage obligation and agrees to apply any property insurance proceeds to the mortgage on the damaged home. "These steps will help more families get into new homes faster while the issues and questions regarding their previous properties are being settled," said Ken Bacon, executive vice president of housing and community development for Fannie Mae. Fannie Mae can be found online at http://www.fanniemae.com.