Katrina Forbearance Extended

The Department of Housing and Urban Development has extended its moratorium on foreclosures of FHA-insured houses in areas directly impacted by hurricanes Katrina and Rita for another 90 days.HUD extended the moratorium until Feb. 29 to give servicers "additional time in which to confirm the homeowners intention and ability to repair the home, retain homeownership and resume making regular mortgage payments," according to a FHA mortgagee letter. Immediately after Katrina struck the Gulf Coast on Aug. 29, FHA, Fannie Mae and Freddie Mac announced mandatory suspensions of mortgage payments for three months to provide relief to hurricane victims. That mandatory forbearance period is coming to end. Now FHA, Fannie and Freddie are advising servicers to continue forbearance on a case-by-case basis.