The Department of Housing and Urban Development introduced an expansion of Federal Housing Administration forbearance relief for borrowers affected by Hurricane Sandy on Friday.
Borrowers may now suspend up to 12 months’ worth 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
Up to 285,922 borrowers in the Sandy-affected areas who were eligible for forbearance relief as of Feb. 28, 2013, may be eligible for an FHA streamlined modification.
“This new loss mitigation option aligns with Fannie Mae and Freddie Mac to provide borrowers coming out of forbearance a streamlined loan modification that will not require a financial assessment,” according to a HUD statement released Friday. “FHA recognizes that borrowers who were current at the time of the disaster should be provided an expedient means of transitioning out of forbearance.”
In the aftermath of Hurricane Sandy, FHA, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac put in place foreclosure and eviction moratoriums on the initiation or commencement of foreclosure actions against homeowners whose properties were damaged or destroyed due to Hurricane Sandy. In January they extended the moratoriums, which apply to homeowners in Presidentially Declared Major Disaster Areas eligible for individual assistance, through April 30, 2013.
The Federal Housing Administration has already instructed FHA-approved lenders to make every effort to communicate with and assist affected borrowers in rebuilding or repairing damaged properties, minimizing delinquencies and retaining their homes.
