As Hurricane Florence advanced on the Carolinas last week, the Federal Housing Administration issued a reminder to mortgagees about its guidance for originating and/or servicing FHA-insured forward and reverse mortgages in presidentially-declared disaster areas.
“This declaration is made when natural or other events are of such severity that it is beyond the combined capabilities of state and local governments to respond,” said FHA Info #18-40. The following guidance applies to all areas covered by a Presidentially-Declared Major Disaster Area (PDMDA):
- FHA-insured mortgages secured by properties in a PDMDA are subject to a 90-day foreclosure moratorium following the disaster.
- FHA-insured reverse mortgages (HECMs) that become due and payable for reasons other than the death of the last surviving borrower and eligible nonborrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
- In PDMDAs only, HUD provides mortgagees an automatic 90-day extension from the date of the foreclosure moratorium expiration date to commence or recommence foreclosure action or evaluate the borrower under HUD’s loss mitigation program.
Mortgagees should review complete servicing guidance in the Single-Family Housing Policy Handbook 4000.1 (SF Handbook), Sections III.A.2 and III.A.3.c relating to the servicing of mortgages in PDMDAs.
Mortgagees can find more information about the policies referenced above and other FHA PDMDA policies on the FHA Resource Center’s Online Knowledge Base.