(Source: HUD) – The Federal Housing Administration (FHA) recently published guidance to help families with FHA-insured mortgages struggling to repair or rebuild their homes in the wake of major disasters like Hurricane Sandy. FHA’s mortgagee letter reinforces the agency’s longstanding policy of extending foreclosure relief and directs lenders to release insurance proceeds to borrowers rather than to apply those payouts to bring delinquent mortgages current.
FHA is also providing consumer-friendly advice to homeowners with FHA-insured mortgages whose homes were damaged or destroyed. Read more about disaster relief options for FHA homeowners.
“These guidelines provide clarity to the lending community and ultimately help families with FHA-insured mortgages to recover from major disasters,” said Acting FHA Commissioner Carol Galante. “Whether it’s giving delinquent borrowers more time to get back on their feet or making sure lenders don’t misuse insurance payouts, our goal is to make sure we put these families on the path to recovery as quickly as possible.”
FHA’s guidance:
Outlines the 90-day moratorium of foreclosures on properties located in the Presidentially-declared disaster areas;
Asks servicers to consider a full range of benefits for the affected borrowers. This includes mortgage modifications, partial claims, use of FHA HAMP or other refinance options; and a waiver of late charges;
Directs lenders to release homeowners’ insurance proceeds to the borrower rather than retaining such proceeds to make up for missed payments; and
Summarizes HUD’s special Section 203(h) mortgage insurance product to assist disaster victims and references HUD’s Section 203(k) Rehabilitation Mortgage Insurance Product.
###
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the
need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build
inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
More information about HUD and its programs is available on the Internet at www.hud.gov and
http://espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at
www.facebook.com/HUD, or sign up for news alerts on HUD’s News Listserv.
Source: HUD
