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a. Presidentially-Declared Major Disaster Areas (04/29/2024)
i. Disaster Declarations
Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, the President has authority to declare a major disaster for any area which has been affected by damage of sufficient severity and magnitude to warrant major disaster assistance. Disaster declarations and information regarding available federal assistance for each disaster incident are posted on the Federal Emergency Management Agency’s (FEMA) website.
Whenever the President declares a major disaster, the Mortgagee must implement the procedures set forth in this section for each designated area that is eligible for federal disaster assistance.
ii. Moratorium on Foreclosures
(A) Standard
The Mortgagee must observe a moratorium on foreclosures of FHA-insured HECMs secured by Properties located in Presidentially-Declared Major Disaster Areas (PDMDA) following the disaster declaration. The foreclosure moratorium is:
• applicable only if the HECM is Due and Payable for reasons other than the death of the last remaining Borrower and is not subject to a Deferral Period;
• effective for a 90-Day period beginning on the date of the disaster declaration for that area (HUD may communicate further specific guidance for extension of moratorium periods for individual disasters); and
• applicable to the initiation of foreclosures and foreclosures already in process.
During the foreclosure moratorium, Mortgagees are granted an automatic 90-Day extension for all servicing deadlines, including the deadlines for requesting to call a HECM Due and Payable and providing notice to HUD of loans which have automatically become Due and Payable.
HUD provides the Mortgagee an automatic 90-Day extension from the date of the moratorium expiration date to commence or recommence foreclosure action or evaluate the Borrower for loss mitigation. Where foreclosure has not been initiated, the Mortgagee may submit a request for an extension to HUD’s foreclosure-related deadlines through Home Equity Reverse Mortgage Information Technology (HERMIT) when prohibited from performing a required activity due to the foreclosure moratorium.
(B) Required Documentation
The Mortgagee must retain in its Claim File any approved extensions from HUD related to a foreclosure moratorium. Where foreclosure was initiated prior to the
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III. SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs Reverse Mortgages
3. Programs and Products - Mortgagee Optional Election Assignment (04/29/2024)
effective date of the moratorium, the Mortgagee must retain in its Claim File documentation of any delay to the Reasonable Diligence Time Frame related to a foreclosure moratorium.
(C) Hazard or Flood Insurance Settlement
The Mortgagee must take no action to initiate or complete foreclosure proceedings after expiration of a disaster-related foreclosure moratorium, if such action will jeopardize the full recovery of a hazard or flood insurance settlement.
iii. Monitoring of Repairs to Substantially Damaged Homes
(A) Definition
A building is considered to be “Substantially Damaged,” as defined in the National Flood Insurance Program (NFIP) regulations, when “damage of any origin is sustained by a structure whereby the cost of restoring the structure to its before damaged condition would equal or exceed 50 percent of the market value of the structure before the damage occurred.”
(B) Standard
The Mortgagee must take appropriate actions to ensure that repairs to Substantially Damaged Properties comply with the federal building elevation standards, including those established by FEMA. The Mortgagee must ensure compliance with any higher applicable building elevation standard adopted by the state or local government.