HUD Extends Foreclosure Moratoriums

The Department of Housing and Urban Development has issued Mortgagee Letter 2006-05, extending foreclosure moratoriums that affect FHA loans in areas of Louisiana, Mississippi, Alabama and Florida.The moratoriums in areas hit by Hurricanes Katrina, Rita, or Wilma will be extended by an additional 120 days. The letter requires lenders to assess the status, condition, and habitability of the mortgaged property by March 31 and establish contact with borrowers to evaluate their short term and long-term plans for housing, employment repayment of mortgage debt and home repairs. If, by March 31, the borrower provides a written commitment to work with the servicer to develop a plan to resolve the mortgage delinquency, the time to initiate foreclosure will automatically be extended an additional 90 days to June 30.