The British Petroleum (BP) oil spill has severely affected the economy of the Gulf of Mexico region. The nine-week-old oil disaster has badly affected the coasts of Louisiana, Mississippi, Alabama and Florida. It has been estimated that around 12,000 jobs could be lost in the Louisiana region alone. Apart from this, due to a ban in oil drilling, a large number of people living in Alaska and Virginia will also lose jobs.
Government sponsored mortgage purchasers, Fannie Mae and Freddie Mac along with Citigroup have come up with mortgage relief for the homeowners residing in the affected regions. Let's take a look at what type of mortgage relief homeowners would receive:
- Forbearance: Both Fannie Mae and Freddie Mac have instructed the mortgage servicers to reduce or suspend the payments of the borrowers for 90 days.
- Extension of forbearance: In certain cases, the servicers may reduce or suspend the payments of the borrowers for 12 months even.
- Cancellation of late fees: If the borrowers stick to the forbearance agreement given to them by the servicers, then they won't have to pay any late fees. In such cases, the servicers have been instructed not to collect the late fees from the affected borrowers.
- Suspension of foreclosures: Citigroup has announced that it is suspending loan foreclosures throughout the affected region till September 17, 2010. Thus, those borrowers, whose first mortgage is owned by CitiMortgage, will not be subject to foreclosure sales if they are occupying homes situated within 25 miles of the affected coastal region.
I feel this is an excellent gesture on the part of Freddie Mac, Fannie Mae and Citigroup to help homeowners who are in the midst of an unprecedented disaster. The steps taken by them will not only help the homeowners to weather this disaster but will also allow them to save their properties from foreclosures and help them get back on their feet.