Lenders, Fannie Mae Ease Mortgage Forbearance Process for Military Personnel.

Business Editors

WASHINGTON--(BUSINESS WIRE)--May 7, 2003

Responding to the special challenges facing America's armed forces, a group of mortgage finance companies, including Fannie Mae and many of its lender partners, have made it easier for military personnel to obtain special forbearance on paying their mortgages.

Effective immediately, the lenders and Fannie Mae will go beyond the Sailors' and Soldiers' Civil Relief Act (SSCRA) mandates and further ease the burden on military personnel when they seek special mortgage forbearance due to hardship.

Specifically, military personnel will be required to submit their active duty orders as the only-needed proof of hardship, instead of the full range of financial statements required with standard forbearance, thus streamlining the process for requesting forbearance.

In addition, Fannie Mae will ask its lender partners to report military indulgence, rather than forbearance, to the credit bureaus, thus protecting the borrower's credit history. This enhanced special forbearance is a temporary change to Fannie Mae's guidelines and may be requested by borrowers through December 31, 2003, unless otherwise extended by the company.

"As they safeguard our security, the last thing America's armed forces should have to worry about is keeping their homes," said Dan Mudd, Fannie Mae's vice chairman and chief operating officer. "Fannie Mae applauds the mortgage industry for making it easier for our servicemen and women to obtain the special hardship forbearance they deserve, given their sacrifices."

The special forbearance is available to all active duty personnel who qualify for relief under SSCRA, if and when needed. To receive the special forbearance, active duty personnel must contact their lenders to request relief. The lender will then work with the borrower to determine an appropriate payment reduction, forbearance period and repayment plan based on the individual's circumstances.

To qualify for relief, the borrower must be currently on active duty with the U.S. military or have been on active duty within three months prior to applying for the relief and have a mortgage that was obtained before the date active duty service began.

By way of background, Fannie Mae's standard military forbearance relief provisions are also in alignment with the SSCRA. These provisions allow the service member and the servicer to work together to provide an adequate amount of relief.

Fannie Mae encourages the service member to pay as much as possible toward the mortgage obligation during his or her active duty tour to keep the accumulated arrears manageable. If a service member is unable to repay accumulated arrears within 90 days after his or her separation from active duty, the company will consider entering an appropriate repayment plan or modifying the mortgage if that is necessary.

In addition, Fannie Mae and its lender partners are working with the U.S. Department of Housing and Urban Development (HUD) to extend special forbearance on all Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) loans covered by SSCRA. More information on HUD's SSCRA initiatives can be found by accessing the following Web site, www.hud.gov:80/offices/hsg/sfh/nsc/qasscra1.cfm.

"The Bush Administration is committed to aiding our Soldiers and Sailors, who sacrifice so much for this country," HUD Secretary Mel Martinez said. "I applaud these leaders in the mortgage lending industry for sharing in this commitment and for taking affirmative steps to protect the financial well-being of our military personnel."

"I am pleased that Fannie Mae and other lending institutions have partnered to offer this special initiative of mortgage forbearance to our armed forces personnel," said Dr. David S. C. Chu, Under Secretary of Defense for Personnel and Readiness. "This initiative will provide mortgage relief to our men and women at a critical time as they are serving their country. This initiative builds on the Soldiers' and Sailors' Civil Relief Act, which provides protection and relief to those serving in our military. It demonstrates the generous support of business leaders and countless individuals who have gone beyond the requirements of law to support our service men and women."

"The mortgage banking industry invests in communities throughout the country and we strongly support our military men and women who are members of those communities," said John A. Courson, Chairman of the Mortgage Bankers Association of America (MBA). "We encourage those who have been called to active duty and are suffering hardships to contact their lender to request relief."

"We appreciate Fannie Mae's efforts to assist the people who defend our country," said Frank Pollack, chief executive officer of Pentagon Federal Credit Union in Alexandria, VA. "These initiatives enable us to serve our members better. More important, it's the right thing to do."

"Navy Federal Credit Union applauds the understanding and sensitivity shown by Fannie Mae and its lender partners to the special circumstances facing the brave men and women of our country's armed services," said Louis W. Jennings, executive vice president, Navy Federal Credit Union. "This initiative recognizes that military personnel, many of whom are in harm's way, should not have to concern themselves with the burden of proving their hardships. These men and women have higher priorities."

For more information on special forbearance, military personnel who are eligible should contact the lender to whom they send their monthly mortgage payment, or call Fannie Mae's Consumer Resource Center at 1-800-7FANNIE (1-800-732-6643), Monday through Friday, from 9:00 a.m. to 5:00 p.m. EST.

Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages.

Fannie Mae is working to shrink the nation's "homeownership gaps" through a $2 trillion "American Dream Commitment" to increase homeownership rates and serve 18 million targeted American families by the end of the decade. Since 1968, Fannie Mae has provided $4.8 trillion of mortgage financing for more than 52 million families.

More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."