This raised a few questions for me. Anyone else?
Total 15 pages
Date: February 14, 2006 (with correction on page 4)
To: All Fannie Mae Single-Family Mortgage Sellers and Servicers
Subject: LL01-06: Hurricane-Related Special Relief Measures
Almost six months after Hurricanes Katrina and Rita ("the Hurricanes") struck the Gulf Coast, servicers have successfully helped many homeowners work through very difficult and challenging situations. Unfortunately, due to the magnitude of the damage and the uncertainties that continue to exist, many homeowners are understandably not yet in a position to make final decisions about rebuilding and returning to their homes. Therefore, Fannie Mae and our servicers continue to put our primary focus and our energies on forbearance policies, repayment plans, modifications, and insurance settlements.
Our disaster relief provisions require servicers not to begin, or continue, any legal action until they can review any effect the disaster may have had on the condition of the property or the borrower's employment or income status. Those provisions also make it clear that foreclosure proceedings may begin (or continue) only when foreclosure is the only alternative. Given the additional time it is taking for some borrowers and servicers to determine the best solution, we expect servicers to continue to defer any legal action until they have the information to complete the assessment.