HUD Mortgagee Letter 2005-46 Assistance for the Victims of Hurricanes Katrina, Rita, and Wilma

HUD released Mortgagee Letter 2005-46 announcing new loss mitigation procedures for victims of Hurricanes Katrina, Rita, and Wilma.  This release gives servicers special authority to use Partial Claims and Loan Modifications to assist the victims in the Individual Assistance areas in Alabama, Florida, Louisiana, Mississippi and Texas.
Assistance is available for the next 18 months in the form of FHA Mortgage Assistance initiative and/or Partial Claim or Loan Modifications.
The assistance is available to borrowers that meet all of the following criteria:
  • Live or have full time employment in a county in Alabama, Florida, Louisiana, Mississippi or Texas that has been declared by FEMA to be eligible for individual assistance as a result of Hurricanes Katrina, Rita or Wilma;
  • Do not currently have the ability to support their normal monthly mortgage obligation due to a verifiable loss of income or increase in living expenses or property damage to their principal residence attributable to Hurricanes Katrina, Rita or Wilma;
  • Own a principal residence that is habitable or can be made habitable;
  • Are committed to continuing to occupy the property as a primary residence;
  • Have missed at least four but not more than 12 mortgage payments on a FHA insured loan.
  • Have not been referred to foreclosure.  Loans that were in foreclosure prior to the implementation of the 90-day disaster area foreclosure moratorium announced in ML 2005-33, should be carefully reviewed to determine if the cause of default has been substantially worsened by the hurricane as only borrowers who have experienced hurricane related losses are eligible for this option.  Loans that are in foreclosure now or are referred to foreclosure after the expiration of the moratorium must have the foreclosure action terminated prior to execution of the repayment agreement or modification.
For a full review of the letter please click the following link:

HUD ML 2005-46


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