New Bill Protects Gulf Homeowners Affected by Oil Spill

Two US representatives from Florida introduced legislation Tuesday to provide mortgage forbearances to homeowners in areas affected by the BP oil spill in the Gulf of Mexico. The bill, called the Gulf Coast Homeowners Relief Act, was introduced by Rep. Jeff Miller  (R-Pensacola) and Adam Putnam, (R-Bartow). “People in Northwest Florida are already dealing with the impact of oil on their shores and are worried about the long term economic and environmental impact of this disaster, they should not also have to worry about losing their home,” Miller said in a news release. Putnam said it was “important to give federal regulators maximum flexibility in assisting homeowners in crisis along the Gulf Coast.” The bill would allow the US Department of Housing and Urban Development (HUD) to provide forbearance for people who sustain economic losses due to the oil spill, the congressmen said. Earlier this month, Fannie Mae (FNM) authorized its servicers to immediately suspend or reduce mortgage payments for borrowers whose properties or income are negatively impacted by the ongoing crude oil spill off the Gulf of Mexico. Servicers may suspend or reduce a borrower’s payments for up to 90 days under the Fannie “Special Relief Measures” policy. While payments are suspended, the servicer can determine the nature and extent of the impact the disaster is having on the condition of the property or on the borrower’s financial condition. A day later, Bank of America (BAC)Freddie Mac (FRE) and Wells Fargo (WFC) granted borrowers in the Gulf Coast region relief on their mortgage payments. Freddie Mac forbearance policies allow its servicers to suspend a borrower’s mortgage payments for up to three months or reduce payments for up to six months. Based on the individual circumstances, borrowers can receive a forbearance for up to 12 months. Write to Kerry Curry. The author held no relevant investments.

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