On March 7, 2019, HUD announced that it is providing foreclosure relief for the victims of the recent deadly tornadoes in Alabama. If you live in an eligible area and are behind in your mortgage payments, you can get a 90-day foreclosure moratorium (postponement) and possibly qualify for other relief. (To learn about disaster relief for homeowners in general, see Help for Homeowners Facing Foreclosure After a Natural Disaster.)
Victims of the tornadoes that happened in Alabama on March 3, 2019, who have an FHA-insured loan, and meet certain criteria, are entitled to a foreclosure moratorium—which means a foreclosure can’t start or proceed. You might also qualify for a loss mitigation option, like a forbearance or loan modification.
Generally, if you fail to make your mortgage payments, the loan owner may foreclose. In some cases, though, a foreclosure moratorium will prevent this from happening—at least temporarily.
HUD is offering an automatic 90-day moratorium on foreclosures of FHA-insured home mortgages in the counties covered listed in this Presidential declaration, specifically Lee County, starting on the day of the declaration (May 5).
HUD is also makings mortgage insurance available to those disaster victims whose homes were destroyed or damaged beyond repair. In addition, HUD's Section 203(k) loan program enables those who’ve lost their homes to get a single mortgage to finance the purchase or refinance a house along with its repair. Homeowners who have damaged houses can also finance the rehabilitation of their existing single-family home.
To learn more, read HUD’s press release.
Under HUD policy, the servicer must review a borrower who has an FHA-insured loan and is behind in payments—or about to fall behind—for a foreclosure alternative. (Read about the foreclosure of FHA loans.)
The servicer generally, subject to a few exceptions, has to evaluate the borrower using a process called a "waterfall" to determine which, if any, of the below options are appropriate. Under the waterfall, a borrower might qualify for a:
(For general information about different loan workout options for borrowers with FHA loans, read Help for Homeowners With FHA Loans. For specific information about your particular situation, call your loan servicer.)
If you need help dealing with your loan servicer, want more information about different ways to avoid foreclosure, or are seeking information about foreclosure relief after a natural disaster, make an appointment to talk to a HUD-approved housing counselor. HUD-approved counselors can provide you with information and advice at no charge.
Effective date: March 5, 2019