Fannie Mae reminds homeowners they can suspend mortgage for up to 12 months for disaster relief

CALIFORNIA – Fannie Mae, a government-sponsored enterprise, announced January 13, that mortgage assistance and disaster relief options are available to homeowners and renters affected by the ongoing wildfires in Southern California.

“If homeowners have been impacted by the fires, we encourage them to call their mortgage servicer for assistance as soon as possible. Homeowners and renters can learn more about disaster relief resources, including personalized support, by contacting Fannie Mae’s free disaster recovery counseling services,” said Fannie Mae senior vice president and chief credit officer Cyndi Danko.

Mortgage servicers also are reminded of options to assist homeowners under Fannie Mae’s guidelines during these circumstances.

Homeowners may request mortgage assistance

Even if a home was severely damaged or lost in the wildfires, the mortgage loan typically remains in effect and must be repaid.

According to Fannie Mae guidelines for single-family mortgages impacted by a disaster:

Homeowners may request mortgage assistance by contacting their mortgage servicer (the company listed on their mortgage statement) following a disaster.
Homeowners affected by a disaster are often eligible to reduce or suspend their mortgage payments for up to 12 months by entering a forbearance plan with their mortgage servicer. During this temporary reduction or pause in payments, homeowners will not incur late fees and foreclosure and other legal proceedings are suspended.
In instances where contact with the homeowner has not been established, mortgage servicers are authorized to offer a forbearance plan for up to 90 days if the servicer believes the home was affected by a disaster.
Following a forbearance plan, there are a number of options available to potentially help homeowners resolve the delinquency without paying a lump sum, including Disaster Payment Deferral and Fannie Mae Flex Modification.

Homeowners and renters should call 855-HERE2HELP (855-437-3243) to access Fannie Mae’s disaster recovery counseling operated by Money Management International or visit the Fannie Mae website for more information.

$135 billion and $150 billion in economic losses

According to Reuters, Bank of America and JPMorgan Chase have already offered disaster mortgage assistance to wildfire survivors.

JPMorgan’s forbearance program will initially last for three months and can be extended in three-month increments for up to 12 months. However, there is a possibility that the relief may be extended beyond that period.

The wildfires are estimated to have caused between $135 billion and $150 billion in economic losses, potentially making them the costliest natural disaster in U.S. history.

“The Los Angeles wildfires underscore the urgent need for financial institutions to prioritize climate risk management,” said Moody’s banking industry practice lead Laurent Birade.