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Wildfire victims get extra time for mortgage payments

By Jeff Lazerson

11/15/18

What I think:  Devastation caused by the recent Woolsey and Camp wildfires includes at least 58 lives lost, more than 9,100homes destroyed, and hundreds of thousands of displaced families along with their pets.

If you or your loved ones own any properties affected in either of these fires, mortgage payment relief and other assistance may be available to you.

First and foremost, call your mortgage loan servicer to learn if it will allow you to forgo a certain number of house payments without late charges, derogatory reporting to the credit bureaus and legal proceedings against you for previous payment default.

Your loan may be owned by mortgage giants Fannie Mae or Freddie Mac, for example, even though you are making payments to ABC Mortgage. Ask the servicer.

Hats off to Fannie Mae. Its bulletin was the clearest, most compassionate instructions that I found regarding these fires. They say:

1) If Fannie Mae owns your loan, you are eligible to stop making payments for up to 12 months. You will not incur late fees, and delinquencies will not be reported to the credit bureaus.

2) Servicers are authorized to suspend or reduce homeowner’s mortgage payments for up to 90 days without any contact with the homeowner if the servicer believes the homeowner has been affected by a disaster.

3) Servicers must suspend foreclosure and legal proceedings if the servicer believes the homeowner was impacted by a disaster.

If your loan is owned by Wells Fargo and you are current on your payments, Wells will provide a 90-day payment deferral, according to spokesman Jim Hines.

Bank of America has reached out to its customers with information about its customer assistance program, which may include mortgage payment forbearance, according to spokesperson Colleen Haggerty.

More vaguely, spokespersons from Chase, U.S. Bank and Citi are encouraging customers to contact them for assistance.

If you have a Federal Housing Administration (FHA) loan, payment forbearance is up to the lender.

“FHA doesn’t have the same authority. We just insure the mortgage,” said Brian Sullivan, a spokesman for the U.S. Department of Housing and Urban Development.

If your loan is guaranteed by the Department Veterans Affairs, it’s also up to the lender.

“VA encourages servicers of VA-guaranteed loans in disaster areas to extend all possible forbearance to impacted veteran borrowers,” said Terrence Hayes, VA spokesman. “VA encourages all servicers to waive late charges to affected loans.”

No matter what any servicing lender tells you over the phone, please ask that customer service person to send at minimum, via email, an outline of the conversation so that you have something in writing to backup what you were told.

It should address the length of time you will be granted a payment waiver or reduced payment, late charge waivers, credit record impacts, and how late payments will be made up. For example, will it be tacked on as a balloon payment once your amortization ends?

The Federal Emergency Management Agency and your insurance carrier also offer other types of assistance.

“If you have suffered a loss, contact your agent or broker to begin the claim process,” said Nancy Kinkaid, press secretary to California Insurance Commissioner Dave Jones. “If you were evacuated by a mandatory order, you may be able to get reimbursed for related expenses, such as hotel costs, food, vehicle rental, even if your home is not damaged or destroyed, under your additional living expenses coverage.”