In an effort to expand relief to homeowners impacted by Hurricane Sandy, HUD Secretary Shaun Donovan announced a series of additional measures to help those households avoid foreclosures.
In addition to relief offered through HUD’s loss mitigation program, the Federal Housing Administration is expanding forbearance relief for affected borrowers.
Under this policy, borrowers may suspend up to 12 months of mortgage payments while they repair their homes and after the forbearance period, borrowers may be eligible for an FHA streamlined loan modification to avoid large lump-sum payments.
"As we work to rebuild entire neighborhoods, we can’t forget that homeowners need some breathing room as they put their lives back together," Donovan said.
He added, "We recognize that families need relief, and by offering expanded forbearance and streamlined loan modifications, FHA is working to provide homeowners with an affordable and permanent mortgage solution."
This new loss mitigation option aligns with Fannie Mae and Freddie Mac to provide borrowers coming out of forbearance a streamlined load mod that will not require a financial assessment.