FHA moratorium on foreclosures after Hurricane Maria ends this week
SAN JUAN – A foreclosure moratorium for Federal Housing Administration (FHA)-insured homeowners in Puerto Rico and the U.S. Virgin Islands ends this week.
After Hurricane Maria struck the islands, the FHA told lenders and servicers to suspend foreclosures for 180 days, and in March the agency extended the moratorium for another 60 days because of the “continuing needs” of the territories. FHA-insured homeowners could qualify for the foreclosure relief if they met certain conditions, such as if their ability to meet mortgage payments was substantially impaired by the disaster.
That moratorium is slated to end May 18.
The FHA also said in March it had introduced a new Disaster Standalone Partial Claim option to help struggling borrowers resume their mortgage payments without a “payment shock,” according to a Department of Housing and Urban Development release.
The program turns up to 12 months of missed mortgage payments into an interest-free second loan on the mortgage, which is payable when the borrower sells the home or refinances it.