HUD Declares Gulf Foreclosure Moratorium

In response to Hurricane Gustav, the Department of Housing and Urban Development has declared a 90-day moratorium on Federal Housing Administration foreclosures in the Gulf Coast disaster areas. "HUD is ready to support families in getting back on their feet as quickly as possible," HUD Secretary Steve Preston said. "One way to do that is call a time-out on foreclosures in these disaster areas and call on the rest of the mortgage lending community to follow suit." The moratorium applies to counties that have been declared disaster areas by the federal government. Freddie Mac told its servicers to be lenient with Gulf Coast homeowners and that they have the "discretion to reduce or suspend mortgage payments or foreclosures for up to 12 months." Fannie Mae has told its servicers they can suspend or reduce borrowers' mortgage payments for up to four months or offer loan repayment plans that may extend up to 18 months, a company spokeswoman said. Fannie servicers also have the discretion to suspend foreclosures on a case-by-case basis.