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.
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:
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.
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:
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).
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:
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.
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.