Fannie Mae has released Lender Letter 03-06 titled, Hurricane-Related Special Relief Measures.

Foreclosure Moratorium

As discussed in Lender Letter 01-06, foreclosures moratoriums were continued for specific counties and parishes in the affected areas. With LL03-06, Fannie Mae continues the foreclosure moratorium through August 31, 2006 for mortgages secured by properties in the following counties or parishes.

Alabama - Mobile;
Louisiana – Calcasieu, Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, and St. Tammany;
Mississippi - George, Hancock, Harrison, Jackson, Pearl River, and Stone;
Texas - Jasper, Jefferson, Newton, and Orange.

To view an Excel Spreadsheet of zip codes for these areas please click on the following.
(4 tabs)

 FanniemaeLL0306.xls

For mortgages secured by properties located in the moratorium area, servicers are reminded to continue working with the borrowers to provide assistance tailored to the particular circumstances faced by each borrower. In addition, servicers should continue making every effort to contact borrowers. Servicers who have been unable to locate borrowers should submit requests for Fannie Mae assistance via e-mail to hurricane_assistance@fanniemae.com.

Foreclosure Approvals

Mortgages secured by properties located in counties and parishes that are not part of the moratorium area should be handled in one of two ways:

• If the property sustained significant damage or the servicer has been unable to contact the borrower since the disaster occurred, the servicer must obtain prior approval from Fannie Mae before beginning or continuing a foreclosure action or requesting relief from the automatic stay in bankruptcy in order to pursue a foreclosure action.
• In all other cases, the servicer should follow established foreclosure policies.

Servicers are reminded that all decisions to begin, continue, or recommend a foreclosure action should be made only when all reasonable loss mitigation efforts have been attempted and foreclosure is the only alternative. If a servicer is in doubt about beginning or continuing a foreclosure action, the servicer should contact Fannie Mae.

Credit Bureau Reporting

Servicers are reminded that they should not report a delinquency to the credit repositories if the missed payment is likely attributable to the hardship caused by the Hurricanes. Servicers should also continue to suspend credit bureau reporting for mortgages in forbearance or under repayment plans. When credit reporting activity resumes, servicers must not report the prior delinquent activity on any mortgage for the period that credit reporting was suspended.

In addition, Fannie Mae requests that servicers not report to the credit repositories any action involving preforeclosure sales, deeds-in-lieu of foreclosure, or short payoffs that are directly attributable to the Hurricanes.

Insurance Claims

The extensions of up to 12 months for filing claims provided by many insurers are set to expire shortly. Servicers are reminded of their obligation to ensure that hazard and, if applicable, flood insurance claims are filed and settled promptly. When a servicer is unable to contact the borrower and is therefore unable to ascertain if a claim has been filed, insurance companies recommend that the servicer contact the homeowner’s insurance agent to determine if the borrower has submitted a claim.

Any questions regarding this Lender Letter should be addressed with the Servicer's Fannie Mae Consultant, Customer Account Manager or directly to the National Servicing Organization's Customer Care Center at 1-888-326-6438 (enter special code 7222 for Hurricane-related questions).

To view the Lender Letter in its entirety please click on the following link.

Fannie Mae LL03-06: Hurricane-Related Special Relief Measures