Army, major mortgage financers sign 'forbearance' agreement
September 27, 2010
WASHINGTON (Army News Service, Sept. 27, 2010) -- The Army, Fannie Mae and several of the country's largest home financiers signed a memorandum of commitment Sept. 27 at the Pentagon which will help Soldiers and their families who are in trouble with their mortgages.
Mortgage lenders joining with Fannie Mae in signing the agreement with the Army included Bank of America, Citi-Mortgage, JP Morgan/Chase, USAA, Wells Fargo, First Citizens Bank and Luxury Mortgage Corp.
In addition, Fannie Mae announced that Soldiers injured on active duty can be granted relief for up to six months from paying their mortgage. During this period of "forbearance," participating banks have agreed not to report any delinquency to credit bureaus. This same relief from mortgage payments is also available to family members of servicemembers killed in action.
Jeff Hayward, senior vice president of Fannie Mae's National Servicing Organization, said that during the six-month forbearance period his company would work with Soldiers and families to find a permanent solution to paying back their mortgage. That solution might include a loan modification or selling their house. He said about 80 percent of the nation's mortgages are covered by Fannie Mae and participating lenders.
"There are a lot of people in this company who have a real passion to do something for Soldiers," said Hayward. "We found that the population for the Army is really not that much different than the general population, with the exception that the general population is not out on active duty and that does make and call for special action."
Aside from forbearance, Hayward added that Fanny Mae had created a special hotline which is available to all servicemembers who need guidance with their mortgage options. <b>The hotline number is 1-877-645-4566</b>.
Hayward said Fannie Mae also went online with a new website last month that also outlines choices available to struggling homeowners and provides guidance on how they can work with their mortgage lenders to avoid foreclosure. The website is <a href="http://www.knowyouroptions.com/military/">www.KnowYourOptions.com/military</a>.
Patrick Sheehy said his company, Chase Home Lending, was approached by Mary Scott, the Fort Gordon, Ga., housing manager who created the idea of an agreement between the lenders and the Army to provide forbearance.
"She realized a lot of military members were struggling just like traditional Americans were with paying their mortgages and also with trying to find financing if they hadn't bought a home yet," he said. "So this was pretty much right in our sweet spot in being able to help our country ... and to provide assistance for people who have been serving our country."
Scott said one of the main issues she was concerned about was that during the housing market turndown, Soldiers were still transferring but weren't able to sell their homes before leaving for their new duty stations.
"There were programs in place for those who were already unable to pay their mortgages, but there was no program for those Soldiers who were current with their loans, but who were anticipating at some point in time they would not be because they couldn't continue to pay rent at a new location and a mortgage at the last," she said.
For her work on the project, Kathleen Marin, director of installation services, presented Scott with the country's third-highest civilian award, the "Superior Civilian Service Award," for initiating the concepts behind the forbearance program and getting the lenders together to brainstorm how they could help Soldiers and their families.
At the signing, Katherine Hammack, assistant secretary of the Army (Installations & Environment), told the lenders that the Army needed organizations like them to continue to pilot ideas, to try ideas and to feel empowered at trying new concepts.
The agreement had been in the works for more than a year, said Vernona Aslim, chief of Housing Operations and Policy in the Army's Office of the Assistant Chief of Staff for Installation Management.
A series of meetings and teleconferences resulted in an agreement with lenders that include:
- A catalog of mortgage services and programs for installation housing service offices to use when counseling Soldiers and family members on home ownership
- A hotline number that HSO counselors can call for answers to questions from Soldiers and families regarding existing mortgages
- A program in which lenders and Army counselors will work closely together to understand each other's programs
"Every day we're trying to figure out how to keep homeowners in their homes," said Hayward. "Or, how to help them leave gracefully."