With much of Houston still underwater, many homeowners throughout the city have been unable to to return to their properties. Survival remains the top priority for most, which means making a mortgage payment on time is unlikely for many residents. As a result, Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) have announced that they will offer forbearance for at least 90 days to Houston borrowers. In other words, borrowers affected by Hurricane Harvey and its subsequent flooding will NOT face late fees if they do not make their mortgage payments on time. Interest, however, will continue to build. Make sure you check with your loan servicer that they will NOT report your mortgage payment as late in making arrangements for forbearance, etc.
According to a recent study conducted by Black Knight Financial Services, this forbearance could help more than 75,000 borrowers throughout the Houston area. With damage similar to that of Hurricane Katrina, it is predicted that these 75,000 will be unable to make a mortgage payment within the next two months. 45,000 may even fail to pay within the next four months.
The ability to avoid your mortgage will depend on the homeowner’s insurance coverage. “It all comes down to your policy. FEMA has caps and limits and Houston is not in a traditional floodplain,” reported Ben Graboske, Senior VP of data and analytics at Black Knight Financial. “It will come down to whatever individual premium and policy coverage is included. That could be about 25 percent of what a house replacement cost is.”
For more information about mortgage payments after a natural disaster like Hurricane Harvey, contact one of our mortgage specialists today.