May 31, 2011
Recent headlines all across America have told of floods, tornadoes and other natural disasters, all of which affect FHA borrowers, their homes and their mortgages.
When an area is declared a major disaster area by the President of the United States, FHA borrowers should know there are programs that can help them in the wake of the disaster, provide help and forbearance on FHA loans, and even temporarily stop foreclosure proceedings.
FHA officials urge borrowers to contact the FHA and the lender as soon as possible in the wake of a disaster as there are many steps that need to be taken in order to get help, advice and work on repairing a home damaged in the disaster area. But even before those calls are made, the FHA has begun taking steps of its own.
According to the FHA official site, “Once the President declares a major disaster, HUD immediately issues a 90-day moratorium on foreclosures and forbearance on foreclosures of FHA home mortgages.”
The 90-day moratorium is just that–a temporary measure designed to give relief to disaster victims. Borrowers are not excused from taking steps to save their homes if they were previously in danger of default or foreclosure, but the moratorium does provide some extra time to get things done.
FHA adds, “In addition, there are FHA mortgage programs that can be used by disaster victims who have lost their homes and are facing the daunting task of rebuilding or buying another home. For example, under FHA’s Section 203(h) program borrowers are eligible for 100% financing.” FHA(h) loans are available for those in Presidentially declared disaster areas for up to one year after the declaration.
In the midst of disaster recovery, FHA borrowers may be offered quick settlements by insurance companies. FHA experts caution borrowers not to be hasty with such settlements, especially if the borrower has not had time to have his or her home inspected after the damage occurred. Do you know how much it will actually cost to repair your property? An insurance company with a settlement check may seem like well-timed financial relief, but if you aren’t well-informed as to the actual costs, that settlement check may not be enough.
When trying to claim benefits in a disaster area, be sure to contact FEMA for information on benefits and requirements for applying. Some disaster relief programs need the recipient to be registered with FEMA before that relief can begin. Learn more at the FEMA site: http://www.fema.gov/assistance/index.shtm
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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