Magazine article Mortgage Banking

Government, MBA, Lenders Continue Hurricane Assistance Efforts

Magazine article Mortgage Banking

Government, MBA, Lenders Continue Hurricane Assistance Efforts

Article excerpt

FOLLOWING HURRICANE KATRINA AND ITS smaller cousin, Hurricane Rita, which devastated the Gulf Coast region, the public and private sectors, including MBA, continue to work in concert with the government to provide relief to storm-tossed victims.

The housing and lending industries pulled together in an ambitious effort to assist owners of damaged or destroyed homes in the disaster zone by offering mortgage grace periods and by working with policyholders to find long-term solutions (see Mortgage Banking, October 2005, p. 14).

The Department of Homeland Security (DHS) and HUD have since announced a series of measures to accelerate the delivery of federal assistance and to provide transitional housing to hurricane victims.

DHS expedited housing assistance to all evacuees unable to meet immediate housing needs with combined efforts from HUD and the Federal Emergency Management Agency (FEMA).

Through FEMA's Individual and Households Program (IHP), DHS processed expedited transitional housing assistance for qualified hurricane-displaced homeowners and renters. Evacuees who were not eligible for assistance through IHP were helped through the Katrina Disaster Housing Assistance Program, administered by HUD.

HUD also announced a no-down-payment mortgage-financing program for hurricane victims, allowing potential homeowners to buy replacement housing anywhere in the United States.

Under the program, called Section 203(h), HUD, through the FHA, will insure mortgages for households in a presidentially declared disaster area whose residences were destroyed or damaged.

Just as it did following Hurricane Katrina, Fannie Mae initiated its disaster-relief provisions for Hurricane Rita victims, including suspension of mortgage payments for up to three months, reduction of payments for up to 18 months and, in severe cases, creating longer loan-payback plans on a case-by-case basis.

Freddie Mac followed suit by permitting mortgage borrowers to temporarily defer their October and November payments for those homeowners affected by Rita. Furthermore, Freddie said it would temporarily ease several underwriting requirements to make it easier for storm victims who lost jobs, income or important financial documents to qualify for a mortgage that Freddie Mac can purchase. …

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