Foreclosure Help After a Natural Disaster: Fannie Mae and Freddie Mac Loans

If you have a Fannie Mae or Freddie Mac loan and have gone through a natural disaster—like Hurricane Florence or Maria—you might qualify for a foreclosure moratorium or other form of mortgage relief.

Homeowners who go through a natural disaster—like Hurricane Florence or Maria—and then have difficulty making their mortgage payments are often entitled to different forms of foreclosure relief, including a moratorium (which means a foreclosure can’t start or proceed) and possibly a foreclosure avoidance option, like a forbearance or loan modification.

Keep reading to learn about foreclosure moratoriums and other types of foreclosure relief that are typically available to homeowners with Fannie Mae and Freddie Mac loans following a natural disaster.

What’s a Foreclosure Moratorium?

Under normal circumstances, if you don’t make your mortgage payments, the loan owner may foreclose. In some cases, though, a foreclosure moratorium will prevent this from happening—at least temporarily.

A foreclosure moratorium might go into effect:

  • When new federal or state laws governing foreclosures go into place. Foreclosures are often delayed while servicers, lenders, and investors figure out how to comply with new regulations.
  • Following a scandal, like the robo-signing scandal. In 2010, many banks imposed moratoriums on foreclosures while they reviewed hundreds of thousands of cases and then adjusted their procedures to fix the robo-signing problem.
  • Following a natural disaster. Loan owners, servicers, and investors often halt foreclosures temporarily following a natural disaster, like after Hurricanes Florence or Maria and after the wildfires in California in 2017.

Understanding Fannie Mae and Freddie Mac

Fannie Mae (the Federal National Mortgage Association or FNMA) and Freddie Mac (the Federal Home Loan Mortgage Corporation or FHLMC) are government-sponsored enterprises that own or back (guarantee) many of the mortgages in the U.S.

When a borrower gets money from a lender to buy a home, that original lender sometimes keeps the loan. Often though, the original lender won’t hold on to the loan. Rather, the lender will sell the loan to a new owner—called an investor—like Fannie Mae or Freddie Mac. Fannie Mae or Freddie Mac then either keeps the mortgage in their portfolio or packages the loan with other loans into mortgage-backed securities, which are then sold to private investors.

Mortgage Relief After a Natural Disaster: Fannie Mae Loans

If you have a Fannie Mae loan and you meet certain criteria, you’re entitled to a foreclosure moratorium and possibly a foreclosure avoidance option, like a forbearance or loan modification, after a natural disaster.

Forbearance. Borrowers affected by a natural disaster—like Hurricane Florence or Maria—may get a forbearance (reduced or suspended payments) for a period of up to 12 months.

Foreclosure relief. Fannie Mae generally also requires that servicers provide certain protections to borrowers, including:

  • imposing a moratorium on all foreclosure sales and evictions for 90 days after the date of the disaster for borrowers with homes located in disaster-declared areas
  • suspending reporting delinquencies to the credit bureaus if the servicer knows the delinquency is due to a hardship resulting from a disaster
  • waiving late charges, and
  • suspending eviction lockouts on REO properties for a specific time period.

Modifications. In some cases, Fannie Mae offers affected borrowers a special post-disaster loan modification. If you don't qualify for a disaster-related modification, you might qualify for a Flex Modification.

Finding out if Fannie Mae owns your loan.To find out if Fannie Mae owns your mortgage, use Fannie Mae's Loan Lookup. For more information about foreclosure relief after a natural disaster, go to the Fannie Mae Disaster Relief website. To find out about foreclosure relief—including a forbearance, moratorium, and/or modification in your particular situation—contact your mortgage servicer (the company you send your monthly payment to).

Mortgage Relief After a Natural Disaster: Freddie Mac Loans

If you have a Freddie Mac loan you might qualify for a forbearance, foreclosure moratorium, loan modification, or other foreclosure relief.

Forbearance. Freddie Mac generally allows servicers to give borrowers a forbearance period of up to 12 months if affected by a natural disaster.

Foreclosure relief. Freddie Mac generally requires servicers to do the following after a natural disaster:

  • impose a 90-day moratorium on foreclosure sales starting on the date that FEMA declared the area to be an Eligible Disaster Area (unless the property was vacant or abandoned prior to the disaster)
  • suspend evictions for a period of time following foreclosures in areas impacted by a natural disaster
  • suspend credit reporting about borrowers who are participating in a disaster-related forbearance plan, repayment plan, or trial period plan, and
  • waive late charges if the borrower is on a forbearance plan or paying as agreed on a repayment plan.

Modifications. Freddie Mac also offers modifications to eligible borrowers. If you've gone through a natural disaster and are having difficulty making your monthly payments, you might qualify for one.

Finding out if Freddie Mac owns your loan. To find out if Freddie Mac owns your mortgage, use the Freddie Mac Loan Look-Up Tool. For more information about relief after a natural disaster, go to the Freddie Mac Natural Disaster Relief website. To find out about foreclosure relief—including a forbearance, moratorium, and/or modification in your particular situation—contact your mortgage servicer.

Getting Help

If you have questions about how foreclosure works in your state or want to learn about possible foreclosure defenses in your circumstances, consider talking to a local foreclosure attorney. If you want to learn more about different ways to avoid a foreclosure, consider talking to a HUD-approved housing counselor.

To learn about foreclosure relief after a natural disaster if you have an FHA, VA, or other type of loan, read Help for Homeowners Facing Foreclosure After Hurricane Harvey, Irma, or Maria: FHA and VA Loans.

Talk to a Lawyer

Start here to find foreclosure lawyers near you.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
FACING FORECLOSURE ?

Talk to a Foreclosure attorney.

We've helped 75 clients find attorneys today.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you