The state of emergency declared in California because of the floods has cleared the way for lenders to provide relief to homeowners with loans guaranteed by Fannie Mae.

Under agency guidelines, lenders can provide forbearance for mortgage holders affected by a disaster once a state of emergency is called. Gov. Pete Wilson declared an emergency in three counties north of San Francisco on Monday.

A borrower is given the benefit of the doubt when he informs the lender of a disaster, said Bob Engelstad, senior vice president of credit policy at Fannie Mae. The forbearance provision lasts until the borrower can determine the extent of damage and how much income might have been lost as a result of the disaster, he said.

Provisions are made to get immediate money to the borrower, without Fannie Mae's approval, if the amount is under $10,000, and foreclosure proceedings are halted to give the borrower time to find adequate replacement housing.

Some California lenders have already announced they will provide forbearance for mortgage holders.

Great Western, Chatsworth, Calif., announced Tuesday it would offer 30 days of forbearance for those who claim to be affected by the floods. After that period, the situation is assessed and forbearance can continue or payments resume, said Melkon Khosrovian, public relations spokesman at Great Western.

Starting Wednesday, Bank of America, San Francisco, will put a three- month moratorium, without late charges, on residential mortgage payments for damaged homes, said Richard Beebe, a spokesman. The bank offered similar provisions after the earthquake in Northridge on Jan. 17, 1994.

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