Hurricane Harvey is predicted to leave in its trail some 300,000 mortgages in delinquency with 160,000 90 days + past due. This is according to Black Knight Financial Services’ latest projections released in September.
Nevertheless, the Federal Housing Administration, Fannie Mae, and Freddie Mac are providing disaster assistance such as forbearance and foreclosure to victims in areas hit by Harvey. The agencies collectively own or insure 900,000 mortgages out of 1.18 million mortgaged properties where Harvey hit hardest, according to Black Knight.
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Harvey and Delinquency
Black Knight, drawing comparisons from data gathered during Hurricane Katrina in 2005, found that Harvey-impacted areas designated by FEMA have twice as many mortgaged properties as in the areas affected by Katrina.
Take a look at how the two hurricanes, Katrina and Harvey took their toll on homes damaged by flood and storm, as monitored by Black Knight.
|Total mortgaged properties||1,180,000||456,000|
|Total amount of unpaid mortgages||$179 billion||$46 billion|
|30 days + delinquency post the disaster||300,000||Rose to 34% from 8.7%|
|90 days + delinquency post the disaster||160,000||Rose to 16.3% from 2.8%|
Post-Harvey Disaster Relief Assistance
“Thankfully, Fannie Mae, Freddie Mac and the Federal Housing Administration have all announced temporary moratoria on evictions and foreclosure sales in Harvey-related disaster areas,” Ben Graboske, vice president for Data & Analytics at Black Knight, stated.
Each of the federal entities has announced their disaster relief assistance to help homeowners and renters who are displaced by the storm and ensuing flood in Texas.
Per its August 28 announcement, the Housing and Urban Development which oversees the FHA will grant a 90-day moratorium on foreclosures, and forbearance on foreclosures of FHA loans. The Department estimates that there are 200,000 FHA-insured homeowners hit by Harvey.
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The HUD is also making available up to 100% financing for the hurricane victims who lost their homes and have to rebuild or buy a new one. This is the 203(k) rehabilitation mortgage program.
Relatedly, the HUD is enabling homeowners who lost their homes to (i) purchase or refinance a home and (ii) pay repairs through 203(k) mortgages.
The HUD will also guarantee loans that would enable state and local governments to rehabilitate public infrastructure.
2. Fannie Mae
For its part, Fannie Mae will implement a 90-day suspension on each of foreclosure sales and evictions for mortgaged properties in the hurricane-affected areas.
Such mortgage borrowers may also qualify for forbearance. This means a temporary suspension or reduction of mortgage payments for up to six months.
To know if you are eligible for this relief or if Fannie Mae owns your mortgage, click here.
3. Freddie Mac
Even before Hurricane Irma, Freddie Mac has disaster relief assistance for Hurricane Harvey. The government-sponsored enterprise offers these options for affected homeowners in FEMA-designated areas:
- Foreclosure suspension by providing forbearance for up to 12 months.
- Waiver of penalties or late fees for borrowers with damaged homes.
- Non-reporting of delinquencies or forbearance for mortgage borrowers in Harvey-affected areas.
Contact your mortgage servicer for a list of Freddie Mac disaster relief options.
Meanwhile, the U.S. Department of Agriculture is offering food assistance through its Supplemental Nutrition Assistance Program for victims of Hurricane Harvey who have evacuated and moved out of Texas because of it.
As the Federal Government continues to assess the actual damage left by Harvey, Black Knight continues to keep tabs on the mortgage performance in the affected areas.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.