Hurricanes and Real Estate Questions
Hurricanes have the potential to damage or destroy hundreds of thousands of homes and put countless families into a financial tailspin. If you’re affected by a natural disaster, what does it mean for your mortgage? Here are frequently asked Real Estate questions and answers and if you’re looking for some tips and tricks to make weathering the storm a little easier – CLICK HERE!
What should I do first?
Get in touch with the following entities:
- The Federal Emergency Management Agency. You can register with FEMA online, in person at a disaster recovery center or by calling 800-621-3362.
- Your homeowners insurance company, plus your flood or earthquake insurance company, if either applies to your situation.
- Your mortgage servicer. That’s the company that you send your monthly payments to; it might not be your original mortgage lender.
I can’t pay my mortgage. What are my options?
If the disaster makes it impossible to make your monthly house payments, ask your servicer for mortgage forbearance. A forbearance ‘allows you to stop making your payments for an agreed-upon time,’ says Lisa Tibbitts, director of public relations for Freddie Mac.
To talk with a Department of Housing and Urban Development-approved housing counselor before agreeing to forbearance, call 800-569-4287.
What aid is available?
FEMA offers grants to fill in gaps between insurance payouts and other loans. The maximum grant is $33,300 per household for disasters that happen in the fiscal year that ends Sept. 30, 2017. Grants can be used for expenses such as basic home repairs that aren’t covered by insurance, temporary rent and disaster-caused medical and child care.
The Federal Housing Administration has a program that’s designed to help disaster survivors rebuild or buy replacement homes. Under the Section 203(h) program, the FHA insures mortgages for people whose homes were destroyed or damaged in disasters. Borrowers don’t have to make a downpayment.
My house was destroyed. Should I keep paying the mortgage?
You should do your best to maintain your credit score. That means paying the home loan if you can afford it until you have talked with the servicer and have reached a settlement with the insurance company.
What happens if I stop mortgage payments without telling my servicer?
If you stop making payments without permission from your mortgage servicer, you could be charged late fees and your credit score could fall.
Homeowners “should call their lender,” says Brian Sullivan, supervisory public affairs specialist for HUD. “Don’t stop answering the phone. Don’t stop opening your mail.”
What if I can’t contact my mortgage servicer?
Whether your loan is guaranteed by Fannie Mae or Freddie Mac, insured by the FHA or guaranteed by the Department of Veterans Affairs, the servicer is expected to reach out to you.
In response to Hurricane Harvey, Freddie Mac is allowing servicers to “verbally grant” 90-day forbearances, and Fannie Mae is letting servicers grant 90-day forbearances ‘even if they cannot contact the impacted homeowner immediately.’
What happens if I’m in foreclosure?
Mortgage servicers receive foreclosure guidance from federal agencies, and the recommendations vary depending on the disaster.
Fannie Mae, Freddie Mac, the VA and the FHA will sometimes suspend foreclosures for 90 days in a Hurricane disaster area.
The house I was buying was destroyed or damaged. What happens now?
If a disaster happens between appraisal and closing, “the lender is expected to take prudent and reasonable actions to determine whether the condition of the property may have materially changed since the effective date of the appraisal report,” according to Fannie Mae’s guide to lenders.
If the damage is relatively minor and covered by insurance, the mortgage can be closed. But if the damage is uninsured, or if it’s major, then the house must be repaired before the mortgage can go through.
As the saying goes, This Too Shall Pass, and when you’re ready to start looking for Panama City Beach property again, I will be here to serve you!