Has your ability to make your mortgage payments been affected by an event classified as a disaster? The recent outbreak of COVID-19 and the declaration of a “national emergency” by the President of the United States mean that you may be entitled to relief to keep your home.
Much of the mortgage industry and the United States Department of Housing and Urban Development are committed to helping borrowers whose lives and livelihoods are disrupted by disaster.
If you cannot pay your mortgage due to the disaster, your lender may be able to help you. If you run the risk of losing your home due to the disaster, your lender can stop or delay enforcement by 90 days. Lenders can also waive late fees for borrowers who may be in arrears as a result of the disaster.
If you have a conventional mortgage, it is highly recommended that you contact your lender for more information and to see if you are eligible for relief.
If you have an FHA-insured mortgage, please read on to find out what options you may have.
How can this FHA disaster relief help me?
HUD has instructed the FHA lenders to use reasonable judgment when determining who an “affected borrower” is. Lenders are required to reevaluate any delayed loan until it is reinstated or foreclosed and to determine the cause of the default. Contact your lender to let them know about your situation. Some of the measures your lender can take are:
During the moratorium period, your loan may not be called foreclosure if you were hit by a disaster.
Your lender will check for damage mitigation support so you can keep your home.
Your lender can complete a forbearance plan or make a loan modification or partial claim if these measures help keep your house and pay.
If it is not possible to save your home, lenders have some flexibility in using the pre-foreclosure sales program or may offer to accept a deed instead of foreclosure.
For more information on the options available, contact the Ministry of Housing and Urban Development directly National maintenance center.
There is additional information relevant to local government from these agencies (particularly HUD), including the permitted use of CDBG funds (Click here).
Below are additional general guides for natural disasters that provide general insight into policies and procedures to help homeowners avoid foreclosures.
Many thanks to Michael Halpern with MuniReg for the disclosure of this information. GOPC will continue to provide information on various programs to help communities during the ongoing COVID-19 outbreak.
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