The


Federal
Housing
Administration
(FHA)
on
Tuesday
issued
an
informational
notice
to
mortgage
lenders
in
which
it
reiterates
various
loss-mitigation
options
afforded
to
companies
and
borrowers
who
are
engaged
in
FHA
lending
programs
in
presidentially
declared
major
disaster
areas
(PDMDAs).

The
guidance
applies
to
origination
and
servicing
for
both
traditional
forward
mortgages
as
well
as
Home
Equity
Conversion
Mortgages
(HECMs)
for
senior
borrowers,
the
agency
said.

“In
the
wake
of
the
devastation
caused
by
Hurricane
Helene,
the
[FHA]
reminds
mortgagees
about
its
guidance
for
originating
and/or
servicing
FHA-insured
forward
mortgages
and
[HECMs]
in
locations
in
the
U.S.
and
its
territories
where
the
president
has
declared
a
major
disaster
under
the
Stafford
Act,“
FHA
said
in
its
notice.

“This
declaration
is
made
when
natural
disasters
or
other
events
are
of
such
severity
that
it
is
beyond
the
combined
capabilities
of
state
and
local
governments
to
respond.”

The
notice
lists
relevant
guidance
found
in
FHA’s
Single-Family
Housing
4000.1
handbook,
including
inspection
and
repair
escrow
environments
for
loans
that
have
yet
to
close.
It
also
applies
to
endorsement,
loan
servicing
and
loss-mitigation
efforts.

Properties
in
PDMDAs
which
have
pending
loans
or
endorsements,
and
which
have
been
designated
for
individual
assistance,
must
have
“a
damage
inspection
report
that
identifies
and
quantifies
any
dwelling
damage.”
The
inspection
must
be
conducted
by
an
FHA-approved
appraiser,
even
if
there
is
no
damage
listed
in
the
report,
which
must
be
dated
after
the
incident
date
or
14
days
from
it,
whichever
is
sooner.

“If
the
effective
date
of
the
appraisal
is
on
or
after
the
date
required
above
for
an
inspection,
a
separate
damage
inspection
report
is
not
necessary,”
FHA
explained.
“All
damages,
regardless
of
amount,
must
be
repaired
by
licensed
contractors
or
per
local
jurisdictional
requirements,
and
the
property
must
be
restored
to
pre-loss
condition
with
appropriate
and
applicable
documentation.”

In
terms
of
loan

servicing
and
loss
mitigation,
FHA
states
that
borrowers
in
PDMDAs
might
be
able
to
qualify
for
either
“formal”
or
“informal”

forbearance
assistance.
Informal
forbearance
is
dependent
on
the
length
of
a
given
foreclosure
moratorium
in
the
PDMDA,
while
formal
forbearance
can
be
considered
“for
borrowers
in
PDMDAs
while
they
are
pursuing
home
repairs
and/or
resolving
verifiable
financial
difficulties
related
to
the
disaster.”

But
for
those
seeking
formal
forbearance
during
repairs,
the
forbearance
period
will
not
exceed
“the
estimated
time
needed
to
complete
the
home
repairs,”
and
the
total
accumulated
mortgage
arrearages
during
the
forbearance
period
cannot
exceed
“the
equivalent
of
12
months
of
principal,
interest,
taxes,
and
insurance
(PITI).”

All
FHA-sponsored
forward
mortgages
inside
PDMDAs
have
an
automatic
90-day
forbearance
period
following
a
declaration
by
the
president.

For
HECM
borrowers,
loans
that
become
due
and
payable
“for
reasons
other
than
the
death
of
the
last
surviving
borrower
and
eligible
non-borrowing
spouse
are
subject
to
a
90-day
extension
of
HECM
foreclosure
timelines,”
according
to
FHA.
Inside
PDMDAs,
the
agency
also
provides
an
automatic
90-day
extension
from
the
date
the
PDMDA
foreclosure
extension
expires
to
“commence
or
recommence
a
foreclosure
action.”

According
to

reporting
published
Tuesday
by
the


The
Washington
Post,
Helene’s
estimated
death
toll
currently
sits
at
125
across
the
southern
U.S.
That
makes
it
one
of
the
deadliest
hurricanes
to
hit
the
country
so
far
in
the
21st
century.

More
than
1.5
million
people
were
without
power
as
of
Tuesday
morning
across
Florida,
Georgia,
North
Carolina,
South
Carolina
and
Virginia,
according
to
the
report.
State
officials
have
estimated
that
the
full
toll
of
damage
will
be
severe,
while
the
impacts
to
real
estate
across
the
region
are

expected
to
be
equally
so.

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