DONOVAN ANNOUNCES EXPANDED EFFORTS
TO HELP HOMEOWNERS IMPACTED BY HURRICANE SANDY
Donovan, joined by Senator Schumer, announces FHA will offer expanded options
to help struggling homeowners at risk of foreclosure due to Hurricane Sandy
WASHINGTON –In an effort to expand relief to homeowners impacted by Hurricane Sandy, U.S. Housing and Urban Development Secretary Shaun Donovan, who also chairs the Hurricane Sandy Rebuilding Task Force, today announced a series of additional measures to allow families to get back on their feet without having to face the prospect of foreclosure.
“As we work to rebuild entire neighborhoods, we can’t forget that homeowners need some breathing room as they put their lives back together,” said Donovan. “We recognize that families need relief, and by offering expanded forbearance and streamlined loan modifications, FHA is working to provide homeowners with an affordable and permanent mortgage solution.”
In the aftermath of Hurricane Sandy, FHA, the Federal Housing Finance Agency (FHFA), 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 (FHA) 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.
In addition to relief offered through HUD’s Loss Mitigation Program, today, FHA is expanding forbearance relief for affected borrowers. Under this policy:
Borrowers may 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 large lump sum payments.
Up to 285,922 borrowers in the Sandy-affected areas who were eligible for forbearance relief as of February 28, 2013, may be eligible for an FHA streamlined modification.
This new loss mitigation option aligns with Fannie Mae and Freddie Mac (the Enterprises) to provide borrowers coming out of forbearance a streamlined loan modification that will not require a financial assessment. FHA recognizes that borrowers who were current at the time of the disaster should be provided an expedient means of transitioning out of forbearance into a permanent mortgage solution.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and http://espanol.hud.gov. You can also follow HUD on twitter @HUDgov, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.