Post-Katrina mortgage forbearance period nears end

http://today.reuters.com/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2005-11-23T203104Z_01_N23515127_RTRIDST_0_FINANCIAL-GSES-KATRINA.XML

WASHINGTON, Nov 23 (Reuters) - U.S. homeowners displaced by recent Gulf Coast hurricanes may face bills from their mortgage lenders again next month, as a forbearance period allowed by the two biggest mortgage finance companies ends in December.

Fannie Mae <FNM.N> and Freddie Mac <FRE.N>, which buy mortgages from lenders and set criteria on underwriting and servicing loans, told servicers after Hurricane Katrina to suspend collections for three months in storm-affected areas.

Both companies set three-month forbearance periods, giving homeowners in disaster areas a break from mortgage payments for September, October and November.

Extensions are available, Fannie and Freddie said, but homeowners must contact their lenders before December to ask for ongoing forbearance.

"Fannie Mae's single-family forbearance policy grants up to 18 months forbearance, on a case-by-case basis, at the discretion of the lenders," said Fannie Mae spokeswoman Janice Walker.

...more...

What if there's nothing left but a foundation, where their house used to be. Do they still have to pay?

Or, more probable is that the house has been damaged. What if the owner had no insurance coverage (very likely, since flood insurance can be quite spendy).

I might just walk away from a deal like that.

(Salem)

Welcome to the DU!!! I'm actually only a few miles from you.....Lake Oswego.

It's a great state we live in.

maybe 6 months or so, still new but i just havent posted nearly at all. :)

Anyways, Merry Thanksgiving!

Welcome to DU!! :toast:

you took the mortgage ..it is a debt..same as car payment if car is totaled...only most drivers have insurance..

if people have no homeowners insurance..well they still owe the mortgage "loan"...

i know..i lost a home in the 94 northridge earthquake..the mortgage companies "called " many loans...and people who couldn't pay them off left in the middle of the night...

and the mortgage companies auctioned the properties off from the middle of the streets..dirt cheep...to what i called sharks...and the homeowners had their credit destroyed!

i was lucky hubby and i always saved our money and we were able to pay off the mortgage..but it almost did us in!!

and on a $2 million loan..we got a mere $1,300.00 from fema!!
yes thats 1 thousand 3 hundred...


and because hubby worked...we were turned down for a 2% sba loan to rebuild...

we sold off the property...but the house was worthless..


we moved east...we did not rebuild...

fly

We think of the mortgage as a loan for our house, rather than a loan against the value of the structures and land. As you know well, in California the land is often more valuable than the improvements. It's one of the reasons they're so eager to offer risky mortgage products with little owner equity --- they can auction off the properties quite easily in any metropolitan area out here. There seems to be no end to the supply of people willing to buy lots with perfectly good but older properties just to tear them down.

We also insure against the value of the structures, so even with a total loss payout on the insurance there may not be enought dollars to meet the mortgage obligation. That's another reason why some people simply walk away.

I don't think so.

With any amount of good luck, those who need more time will be able to obtain further extensions. This has got to be an incredible hardship.

loss of all aid if they leave.. do they know this..??

http://www.abovetopsecret.com/forum/fema.html

eom