U.S. Housing and Urban Development Secretary Julián Castro recently announced that theU.S. Department of Housing and Urban Development (HUD) will quickly provide federal disaster assistance to the State of Louisiana as well as provide support to homeowners and low-income renters forced from their homes due to severe storms and flooding.
Specifically, HUD is granting immediate foreclosure relief to these homeowners granting a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages. This means that during the term of a moratorium, loans may not be referred to foreclosure if the borrower was affected by the disaster but the lender will evaluate for any available loss mitigation assistance to help homeowners retain their homes. Likewise, HUD shares that the lender may enter into a forbearance plan, or execute a loan modification or a partial claim, if these actions will help retain and pay for the home. Additionally, if saving the home is not feasible, lenders have some flexibility in using the pre-foreclosure sales program or may offer to accept a deed-in-lieu of foreclosure.
HUD says homeowners may be eligible for FHA Disaster Relief if they live within the geographic boundaries of a Presidentially-declared disaster area. If they are, they will be automatically covered by a 90-day foreclosure moratorium. As well, if a person is a household member of someone who is deceased, missing or injured directly due to the disaster, they also qualify for a moratorium. Likewise, if their financial ability to pay their mortgage debt was directly or substantially affected by a disaster, they qualify for a moratorium.
President Obama issued a disaster declaration for Acadia, Ascension, Avoyelles, East Feliciana, Evangeline, Iberia, Iberville, Jefferson Davis, Lafayette, Point Coupee, St. Landry, St. Martin, St. Tammany, Vermilion, Washington and West Feliciana have joined East Baton Rouge, Livingston, St. Helena and Tangipahoa parishes this week. With the President’s declarations, HUD is allowed to offer foreclosure relief and other assistance to certain families living in this county.
“Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Castro. “Whether it’s foreclosure relief for FHA-insured families or helping these counties to recover, HUD stands ready to help in any way we can.”