The Department of Housing and Urban Development announced this week that the Federal Housing Administration is extending the foreclosure moratorium for Hurricane Maria victims in Puerto Rico and the U.S. Virgin Islands.
Originally, the FHA told lenders and servicers to suspend foreclosures on the islands for 180 days, but the FHA announced this week that it is tacking an additional 60 days onto the foreclosure moratorium due to the “extensive damage and continuing needs in these hard-hit territories.”
Under the expanded moratorium, FHA is instructing lenders and servicers to suspend all foreclosure actions against insured borrowers in these Presidentially Declared Major Disaster Areas until May 18, 2018, HUD said this week.
According to HUD, FHA-insured homeowners may qualify for the foreclosure relief under the following conditions:
- The household lives within the geographic boundaries of a presidentially declared disaster area impacted by Hurricane Maria
- A household member of someone who is deceased, missing or injured directly due to the disaster
- The borrower’s ability to make mortgage payments is directly or substantially affected by a disaster
The @HUDDepSec and I just called @RicardoRossello to tell him that @HUDgov is extending our foreclosure moratorium for @FHAgov insured homeowners for an additional 60 days due to the extensive damage and continuing needs in these hard-hit areas https://t.co/358MyaInwg pic.twitter.com/JIHBLSkykb
— Ben Carson (@SecretaryCarson) March 1, 2018
The move comes on the heels of FHA extending new foreclosure relief to borrowers affected by 2017’s natural disasters.
The FHA introduced a new Disaster Standalone Partial Claim option, which would help struggling borrowers to resume their mortgage payments without a payment shock. The program wraps up to 12 months of missed mortgage payments into an interest-free second loan on the mortgage. The second loan is then payable when the borrower sells their home or refinances.
“It’s clear that FHA homeowners in these areas need more help to get back on their feet as they recover from these storms,” HUD Secretary Ben Carson said last week. “Today, we offer immediate relief to these borrowers which will allow them to resume their mortgage payments without crippling payment shock and fees while protecting our insurance fund in the process.”
To read the FHA’s mortgagee letter about the extended foreclosure moratorium, click here.