The Federal Housing Administration (FHA) is putting measures in place to help borrowers in Puerto Rico and the U.S. Virgin Islands impacted by Hurricanes Irma and Maria last fall.
The FHA is updating its menu of foreclosure prevention options to allow borrowers with delinquent FHA-insured mortgages with ways to bring their mortgages current without increasing their interest rates or monthly payments. Further, it is offering a 30-day extension of its foreclosure moratorium to allow FHA-insured homeowners in Puerto Rico and the U.S. Virgin Islands more time for mortgage resolution.
These options are part of the FHA’s Disaster Standalone Partial Claim, which will be the first mortgage relief option available for hurricane victims with FHA-insured homes located in Puerto Rico and the U.S. Virgin Islands.
The updated Disaster Standalone Partial Claim provides borrowers in need of a permanent resolution with an opportunity to be immediately evaluated for a permanent loss mitigation solution that is affordable and sustainable. It allows them to resume making payments without modifying their loan and re-amortizing the loan term.
The option covers missed mortgage payments up to 30 percent of unpaid principal balance through an interest-free second loan on the mortgage, payable only when the borrower sells the home or refinances their mortgage.
“We need borrowers to contact their servicers right away and begin the process of finding a permanent solution to their mortgage situation,” FHA Commissioner Brian Montgomery said. “We have a lot of options available to help FHA-insured families keep their homes, but every day we wait, those options become more limited. Meanwhile, we intend to monitor our servicers very closely to make sure eligible families get the mortgage relief they qualify for.”