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June 21st, 2010

Mortgage Relief for Victims of Oil Spill

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Fannie Mae and Freddie Mac recently announced some mortgage relief for homeowners impacted by the BP oil spill. According to financial expert Peter Miller, the relief is in line with other typical mortgage forbearance granted during natural disasters.

Basically, both Fannie and Freddie have given servicers the option to suspend or reduce mortgage payments for borrowers directly affected by the spill.

According to Fannie Mae:

Under the company’s “Special Relief Measures” policy, servicers may suspend or reduce a borrower’s payments for up to 90 days while the servicer determines the nature and extent of 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, 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.

According to Freddie Mac:

Freddie Mac’s forbearance policies give servicers the discretion to suspend a borrower’s mortgage payments for up to three months or reduce payments for up to six months. Servicers may recommend forbearance for up to twelve months, based on the borrower’s individual circumstances.

Fannie and Freddie both advise borrowers to contact their servicers to find out more about their Special Relief Measures.

It’s important to know all the details about your mortgage forbearance before you proceed. Miller offers the following advice:

If you are able to get mortgage payments suspended, be sure to ask your servicer how the money is to be repaid. For instance, will money be added to your monthly cost once payments resume? Will the loan term be extended? Etc.

If a foreclosure action is halted can you bring your loan current and stop the foreclosure during the suspension period?

Also, if you’re turned down by your servicer ask if their decision can be appealed. If yes, to whom?

Finally, carefully document all servicer contacts — name, date, who you spoke with, etc. Send in paperwork by certified mail with a return receipt requested to prove when things were sent — and when they were received.

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6 Responses to “Mortgage Relief for Victims of Oil Spill”

  1. Tony Orlando Says: June 21st, 2010 at 1:45 pm

    Hi. I read a few of your other posts and wanted to know if you would be interested in exchanging blogroll links?

  2. Tony Orlando Says: June 21st, 2010 at 2:01 pm

    I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

  3. Tim Manni Says: June 21st, 2010 at 2:20 pm

    Tony,

    We added you to our blogroll long ago thinking you were going to add us as well. Is that still going to happen?

    -Tim

  4. Tweets that mention Mortgage Relief for Victims of Oil Spill | HSH Financial News Blog -- Topsy.com Says: June 21st, 2010 at 4:01 pm

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  5. News about Mortgage Loan Forbearance issue #1 Says: June 23rd, 2010 at 1:30 pm

    [...] (blog)Home loan modifications, principal reductions, and unemployment forbeara more… Mortgage Relief for Victims of Oil Spill – HSH Financial Publishers (blog) – blog.hsh.com 06/21/2010 TopNews United Kingdom (blog)Mortgage Relief for Victims of Oil [...]

  6. News about Mortgage Loan Forbearance issue #1 Says: June 26th, 2010 at 12:03 pm

    [...] by the Obama administration, the state will create a mortgage modification p more… Mortgage Relief for Victims of Oil Spill – HSH Financial Publishers (blog) – blog.hsh.com 06/21/2010 Christian Science Monitor (blog)Mortgage Relief for Victims of Oil [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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