HUD Offers New Mortgage Relief Program

The Department of Housing and Urban Development is offering a new mortgage assistance program to help an estimated 20,000 Federal Housing Administration borrowers who have been displaced or unemployed by Hurricane Katrina and other recent disasters.HUD will be able to advance mortgage payments for up to 12 months to disaster victims under the Mortgage Relief Assistance program, which was approved by the White House budget office on Dec. 1. The temporary program, which expires in 18 months, is designed to help hurricane victims return to their homes (if they are livable or repairable) or stay in their homes if they are unemployed. This assistance will let them "come back home and concentrate on putting their lives in order, without worrying about making mortgage payments," HUD Secretary Alphonso Jackson said. While HUD would make the advances, the borrower would be obligated to pay it back when the property is sold or the first mortgage is paid off. Until then, a second lien with zero interest would be attached to the property. HUD estimates that the MRA program would cost $200 million.