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Question: With hurricane season approaching, what recommendations do you have for a mortgage lender to prepare for a natural disaster?

Answer:

Lenders must adequately train applicable staff on where and how to locate disaster guidance and resources. Such guidance and resources may come from individual investors or from agencies. The agencies, HUD, VA and others maintain the following disaster preparation and response webpages all of which provide important information to lenders:

• Fannie Mae Disaster Response – includes Disaster Relief Single Family Selling/Servicing Frequently Asked Questions (FAQs)
• Freddie Mac Disaster Relief
• HUD Disaster Resources
• VA Guidance on Natural Disasters
• FHFA’s Mortgage Loan and Natural Disaster Dashboard – online risk analysis tool intended to give property owners, financial institutions, and other stakeholders better insight into which areas of the country are most likely to incur greater damages from hurricanes, flooding, wildfires, and other types of natural hazards.
• Federal Emergency Management Agency (FEMA)’s Disaster Information this page provides a “search by location” tool to identify active and past disaster declarations.

Lenders should develop written policies and procedures addressing disaster response. Such policies should outline requirements for confirming whether a subject property is located in a federal declared disaster area, property inspections (if and when necessary), and other applicable requirements.

Lenders should also consider whether they are properly prepared for situations in which their employees or office locations may be directly impacted by a natural disaster. Lenders must maintain and periodically test their disaster recovery and business continuity plans in this regard.