The Housing and Urban Development Department today announced it has directed all FHA-approved lenders to extend a moratorium on foreclosures of FHA-insured mortgages another 120 days.
The previous moratorium on foreclosures was in effect through Feb. 28, and the HUD decision extends that foreclosure moratorium for FHA-insured homeowners until June 30, 2006, for those homeowners who establish a plan by March 31 to pay off the delinquent mortgage debt.
“By preventing the possibility of foreclosure for another four months, we want to ease the pressure on FHA-insured borrowers as they try to put their lives back together in the aftermath of the storms,” said HUD Secretary Alphonso Jackson.
The extended moratorium applies to all FHA-insured loans in presidentially declared disaster areas eligible for individual assistance as a result of Hurricanes Katrina, Rita and Wilma. To be eligible for the full 120-day moratorium, borrowers must make a written commitment to work with their lender on a plan to resolve their mortgage delinquency, according to the announcement.
This commitment must be received by the lender on or before March 31, 2006. Borrowers are encouraged to contact their lender as soon as possible to learn about available options.
Today’s action follows two previous foreclosure moratoriums declared by HUD. For more information, FHA homeowners should contact their lenders or call HUD’s National Servicing Center at (888) 297-8685. Specific guidance for FHA-approved lenders can be found on HUD’s Web site: www.hud.gov.
On Dec. 1, HUD announced a special Mortgage Assistance Initiative for FHA-insured homeowners who were directly affected by the disasters, have a home that is habitable or can be repaired and are committed to continued occupancy of the property as their main residence. Under the Initiative, FHA will advance up to 12 monthly mortgage payments for borrowers in default for 120 days or more. The payments made on the borrowers’ behalf are secured by an interest-free subordinate mortgage and no repayment is required until the first mortgage is paid in full.
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