Fannie Mae and Freddie Mac, the two government-sponsored entities that finance the majority of mortgages in the U.S., have announced relief for homeowners affected by the record-breaking wildfires currently affecting California.
The two GSEs said borrowers living in disaster zones that have been officially declared as such by the Federal Emergency Management Agency may be eligible to stop making mortgage payments for 12 months. In addition, Fannie and Freddie said they would also waive assessments of penalties or late fees against those with damaged homes, and would not report delinquencies during that time period.
The GSEs are also said to be urging lenders to consider borrowers who work in eligible disaster areas but who may have homes in unaffected areas to also be able to receive some of the standard relief policies, like forbearance or mortgage modifications.
Lenders have further been authorized to suspend or reduce a homeowner’s mortgage payments immediately for up to 90 days without any contact from homeowners who they believe have been affected by the disaster.
“Our thoughts are with the families and communities impacted by the devastating California wildfires,” said Carlos Perez, a senior vice president at Fannie Mae. “Fannie Mae and our servicing partners are focused on ensuring mortgage assistance is available during this challenging time. We urge everyone in the area to be safe, and we encourage homeowners affected by the fires to contact their mortgage servicer for assistance as soon as possible.”
California is facing an outbreak of about 16 wildfires that span across the state. More than 4,000 firefighters are trying to fight the blazes, which have destroyed thousands of homes and continue to threaten thousands more. In Southern California, 20,000 residents were forced to evacuate. The largest fire in California’s history is the Mendocino Complex Fire, which has scorched more than 305,152 acres in Northern California as of Thursday night.