Archive for the ‘BP oil spill’ Category

Homeowner victims of Gulf oil spill consider mortgage relief

Friday, June 25th, 2010

Freelance writer Craig Guillot filed this special report from New Orleans

Lanvin LeBlanc, a Louisiana fisherman, watched his business come to a halt in early May when federal officials shut down his fishing waters due to the BP-Gulf oil spill. Though LeBlanc owns his own home, he has a home equity loan and wonders what will happen if the fishing situation doesn’t improve.

“I haven’t asked for a deferment yet because we’re getting paid by BP, but I can’t say what’s going to happen in the future,” said LeBlanc of Lafitte. “I’ve fished for 30 years, it’s all I’ve ever done…If I can’t fish, I can’t make a living.”

It may be too early to say how the oil spill fully impacts homeowners, but Fannie Mae and Freddie Mac authorized their servicers this month to suspend or reduce mortgage payments for Gulf Coast residents affected by the oil spill – a measure of mortgage relief that is called . Fannie Mae, for example, is directing servicers to reduce payments for up to 90 days. Afterwards, if help is still needed, loan holders will be evaluated on a case-by-case basis for an additional 3 months of forbearance, loan modification or a custom solution (it’s unclear whether this would also cover home equity loans).

Mortgage assistance demand will depend on spill’s outcome

In Belle Chasse, Coldwell Banker TEC realtor Bonnie Buras said that the oil spill’s effect on mortgages and loans remains to be seen, but the moratorium on deepwater drilling -  as well as the closure of fishing waters – means limited income for some homeowners. “It could be really frightening. If you’re a fisherman and you can’t work you have no income. And if you have no income you can’t even ( or get a new loan),” said Buras.

Joe Ory, president of the New Orleans Metropolitan Association of Realtors, said the need for mortgage relief  in coastal areas like Grand Isle, Port Fourchon, Houma and Venice could become serious. “These people who have lost their income need immediate financial assistance. And if they don’t get it, you’re going to start seeing foreclosures,” said Ory. The need for mortgage relief may even end up being greater in Florida, which has been hit hard by the , than in other Gulf Coast regions where fishermen like LeBlanc have managed to pay off their modestly-valued houses.

BP financial aid seems to be helping Gulf fishermen for now

Like thousands of other fishermen from Louisiana to Florida, LeBlanc has been turning to BP for work under the Vessels of Opportunity (VOO) program – but few fishermen have been called to service.  Like LeBlanc, many are getting by on the more than $105 million in claims that BP has paid out so far to more than 32,000 businesses to reimburse them for lost income. Most of the BP payments are capped at $5,000 per month. That may help cover mortgages and other financial obligations for the time beingbut some say the payments are taking too long. And others worry what will happen in six months if they still can’t fish and BP discontinues or lessens the aid

Citigroup, Inc. and Wells Fargo & Co. have also announced mortgage relief for coastal areas hit by the spill in the Gulf of Mexico. Citigroup said it will suspend foreclosures and create other protective measures for homeowners within 25 miles of the coast. According to Sanjiv Davis, head of CitiMortgage unit, the decision would protect 1,200 homeowners.

Homeowners in the Gulf region who are experiencing hardships are encouraged to call their lenders and explain the situation. Many banks may not have formal programs for dealing with hardships but are willing to work with homeowners on a case-by-case basis to provide mortgage relief. Homeowners can also learn more about program and  program.  - By Craig Guillot.

Photo credit: Fishing boats in Louisiana by via Creative Commons

Are you a homeowner affected by the oil spill? If so, please share your thoughts below:

Enter coupon code mbaiv at checkout to save big write my paper for me today