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Hurricane Relief Extended to Feb. 28
The banking agencies released statements responding to consumers and lenders as the 90 day payment deferral period following Hurricane Katrina closed December 1. There is a tremendous volume of customers affected by recent hurricanes who are not even close to working out existing loans with their financial institutions.
Housing and Urban Development (HUD) announced an extension of the foreclosure moratorium for FHA-insured loans in hurricane-affected areas until February 28, 2006. HUD also instructed all FHA-approved lenders to provide additional foreclosure relief to FHA-insured families who live or work in those areas hardest hit by Hurricane Katrina and Rita. The relief affects all pending foreclosures of FHA-insured properties in the Presidentiall- declared disaster areas designated by FEMA as eligible for individual assistance. Additionally, it prohibits lenders from initiating new foreclosures. They also again encouraged lenders to undertake actions such as assisting borrowers with hazard and flood insurance filings, waiver of late charges, and mortgage modification.
Freddie Mac also extended its foreclosure suspension period to the same date and provided additional guidance regarding servicing requirements for these loans. Fannie Mae is expected to make a similar announcement.
Specific guidance for FHA-approved lenders can be found on each agency's website.
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 12, 12/05
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