For the second time this year, the Department of Housing and Urban Development and the Federal Housing Administration are extending the foreclosure moratorium for Hurricane Maria victims in Puerto Rico and the U.S. Virgin Islands.
Earlier this year, the FHA told lenders and servicers to suspend foreclosures on the islands for an additional 60 days, adding nearly two months onto the original 180-day moratorium on foreclosures on the islands.
That extended freeze was due to expire on Friday, May 18, but now, HUD and the FHA are extending it again.
HUD and the FHA announced Wednesday that they are adding 90 more days on to the moratorium to address the “continuing needs in these hard-hit territories.”
As part of the announcement, HUD told all FHA-approved mortgage servicers to suspend all foreclosure actions against eligible FHA borrowers in those Presidentially Declared Major Disaster Areas until Aug. 16, 2018.
Today, I called Puerto Rico Governor @RicardoRossello, U.S. Virgin Islands @GovernorMapp, Representatives @Jenniffer2012 @StaceyPlaskett to share @FHAgov has extended its foreclosure moratorium for an additional 90 days in their communities. https://t.co/uPK3mqIyRd pic.twitter.com/ooBUIjaYPR— Pam Patenaude (@HUDDepSec) May 16, 2018
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 extension isn’t the only step HUD has taken to address the issues facing the people 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 earlier this year. “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.”