Mortgage giant Fannie Mae (FNM) announced Wednesday that loan servicers may suspend or reduce mortgage payments for homeowners affected by the Gulf oil spill for 90 days through its disaster relief program.
Fannie Mae does not require that banks managing its loans suspend mortgage payments, but it encouraged homeowners impacted by the oil spill to contact their loan servicers to work out a payment plan.
"We want to give homeowners every opportunity to weather this unprecedented disaster, including relief from their mortgage payment if that will help them get back on their feet and stay in their homes," said Michael J. Williams, Fannie Mae president and CEO, in a statement.
The company does not track how many homeowners have received direct mortgage relief under the policy, which has been in place for years. “It’s up to the servicer to work with the borrower to ascertain the facts and determine what’s best on a case by case basis,” said Janis Smith, a Fannie Mae spokeswoman.
But Fannie’s call to aid Gulf coast homeowners has been heard by at least one servicer – on Wednesday Citigroup announced that it would suspend home foreclosures within 25 miles of the Gulf coast for a three-month period. The policy will protect about 1,200 homeowners living along the Mississippi, Florida, Alabama and Louisiana coasts, Bloomberg reported.
The Citibank suspension starts Thursday and applies only to loan owned by the bank’s mortgage unit said the bank.
Freddie Mac has not yet announced a similar relief policy.
Fannie and Freddie, which have operated under government conservatorship since 2008, announced Wednesday that they will de-list their shares on the New York Stock Exchange. The companies' stocks did not meet the exchange’s listing requirements -- they've hovered around $1 a share since 2008.