Fannie Mae and Freddie Mac today announced a new disaster payment deferral option for servicers to offer customers. Both issued communications to servicers expanding the existing definition of “eligible disaster” to include a financial hardship (such as a loss or reduction of income or increase in expenses) that affects a borrower’s ability to pay their contractual monthly payment.
In addition, either the property securing the mortgage loan must experience an insured loss; the property securing the mortgage loan must be located in a FEMA-declared disaster area eligible for individual assistance; or the borrower’s place of employment must be located in a FEMA-declared disaster area eligible for individual assistance.
The bulletin also provides detailed eligibility requirements and exclusions for this payment deferral option. Servicers will be required to use this option in evaluating eligible borrowers beginning Oct. 1, but Freddie Mac encouraged servicers to begin implementing the changes as soon as possible.