The Federal Housing Administration this week again extended the timeline for reverse mortgage foreclosures in territories affected by Hurricane Maria last year.
All Home Equity Conversion Mortgage foreclosure timelines will be extended through August 16 in the Presidentially-Declared Major Disaster Areas (PDMDAs) in Puerto Rico and the U.S. Virgin Islands — which cover the entirety of both territories.
“It applies to both the initiation of foreclosures and foreclosures already in process on HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse,” the FHA noted in its announcement.
In March, FHA and the Department of Housing and Urban Development extended the timeline through May 18 after multiple public calls for relief amid the devastation on the island territories. Had the agency not provided the reprieve, reverse mortgage servicers would have no choice under the law but to initiate or continue foreclosure proceedings.
“Given that [FAR] does not have control over foreclosure timelines with respect to insured loans, we believe the best outcome for homeowners in this area would be an extension of HUD’s foreclosure moratorium, and intend to advocate for this extension directly to HUD,” Finance of America Reverse president Kristen Sieffert told NJ.com in February.
David Levis, president and CEO of the San Juan-based The Money House Inc., told RMD earlier this year that the reverse mortgage impact in Puerto Rico was minimal, with no borrowers reporting the loss of their entire properties — and typical damage costs of about $1,000 to $2,500.
Read the full announcement from the FHA, issued as INFO #18-21, at the agency’s website.
Written by Alex Spanko