How extreme weather could affect mortgage payments, what you can do
- Helene has devastated parts of the Southeast
- Hurricane Milton is set to make landfall this week
- Lack of insurance, loss of income can making paying mortgage difficult
Destroyed houses and buildings along the Broad River in the aftermath of Hurricane Helene on October 1, 2024 in Bat Cave, North Carolina.
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(NewsNation) — Severe weather is decimating the Southeast, causing numerous headaches for homeowners in affected areas.
Victims of Hurricane Helene may struggle to afford to rebuild without flood insurance, and those with a mortgage may be unable to keep up repayments if they’re left without a source of income as a result of the storm.
The destruction in the region is likely to be made by worse by Hurricane Milton, which is forecast to hit Florida this week as a major hurricane.
What are homeowners’ options for mortgage payment relief?
With extensive damage to homes widespread, insurance that does not cover all or the majority of destruction can cause delayed or defaulted payments.
Despite the dire situations extreme weather victims can find themselves in, options are available.
Fannie Mae released an informational notice last week reminding homeowners of available options.
A 12-month reduction or suspension of payment is often available via a forbearance plan. Subsequently, homeowners may also qualify for disaster payment deferral.
“Homeowners facing hardship due to the hurricane should contact their mortgage servicer to discuss relief options as soon as they’re able to do so,” said Cyndi Danko, a Fannie Mae senior vice president and chief credit officer.
A 2024 University of Edinburgh study of extreme weather and its effect on repayments found the more severe a hurricane was, the higher the likelihood an individual would default on their mortgage.
More than 3.5 million payments and almost 70,000 mortgages were analyzed, in addition to heavy rainfall and hurricane and tropical storm data.
“Our results suggest that extreme weather leads to substantial changes in risk and against this background it seems necessary to systematically account for this in credit risk assessment,” Raffaella Calabrese, lead researcher, said in a news release.
Those with questions about their financial situations following natural disasters can call 855-HERE2HELP (855-437-3243).
