Homeowners whose properties have been lost or damaged by the wildfires in California this year might be able to defer their mortgage payments by up to 12 months, according to government-backed mortgage servicers Fannie Mae and Freddie Mac.
The two mortgage giants yesterday issued guidelines for wildfire victims in the state, saying they may be eligible to stop making payments at three month intervals, for up to one year. They may also be able to avoid late fees during this period, and to avoid having delinquencies listed by credit ratings agencies.
Fannie and Freddie said that mortgage providers have been told to suspend or reduce homeowner’s mortgage payments immediately for 90 days if they believe that person has been affected by wildfires, without the homeowner needing to make contact with them. For those who wish to extend the forbearance period to 12 months, they’ll need to reach out to their lender for assistance. Fannie and Freddie have more information on how this works on their websites.
In addition, the HUD’s Section 203(h) program also provides FHA insurance for disaster victims who’ve lost their homes completely, and now need to buy or build another home. Borrowers whose mortgage agreement was made with an FHA approved lender could be eligible for 100 percent financing, including any closing costs.
“Our thoughts are with the families and communities impacted by the devastating California wildfires,” Carlos Perez, chief credit officer at Fannie Mae, told the Napa Valley Register. “We urge people to stay safe during this challenging time. If homeowners have been impacted by the fires, we encourage them to call their mortgage servicer for assistance as soon as possible.”
Wildfires were sparked across 335 square miles of Northern California about two weeks ago. President Donald Trump has issued a major disaster declaration for Butte, Lake Mendocino, Napa, Nevada, Orange, Sonoma, and Yuba counties. An estimated 7,000 homes and structures have been destroyed, and 42 people have died.