The following was released by HUD reminding mortgagees of Mortgagee letter 2005-45, discussing foreclosure moratoriums for victims of Hurricanes Katrina and Rita.

Notice for Mortgagees on Foreclosure Extensions:

At this time, many properties impacted by Hurricanes Katrina and Rita in Southern Louisiana are still awaiting repair or rebuilding.  While the Louisiana Recovery Authority (LRA), the entity administering grants under the Louisiana Road Home program, is working diligently to process the applications, there are many mortgagors who remain unable to return to their homes and resume normal payments at this time.  

HUD is cognizant of the stress this situation has caused for borrowers and servicers, alike, and appreciates the level of assistance having been offered to borrowers thus far.  Mortgagees are reminded that FHA Mortgagee Letter 2005-45 included the following statement:

"There is no automatic extension of the foreclosure moratorium for properties located outside the individual assistance areas.  However, if a mortgagee...believe[s] it is in the best interest of the government to delay foreclosure or initiation of foreclosure until an assessment can be completed, they may submit form HUD-50012, "Mortgagee's Request for Extension of Time", to HUD's National Servicing Center, as per normal guidelines, indicating the name of the disaster and the reason the extension is needed."

While work continues in an effort to restore Louisiana to normal, mortgagees are strongly urged to request extensions to foreclose on mortgages where borrowers affected by Hurricanes Katrina and Rita are still awaiting grant processing.  Mortgagees should indicate in the Request for Extension if they have received a copy of the borrower's application for a grant from the Louisiana Recovery Authority.  It is not necessary to provide a copy of the application with the extension request, however, mortgagees will need to confirm receipt of such documentation in the basis for the request and provide the status of the application (i.e., awaiting an appointment, awaiting closing, etc.,) as well as the borrower's intent to repair and return to the property.  This will allow HUD to provide an appropriate amount of extension time.

If there is any question regarding this subject, please contact HUD's National Servicing Center at: (800) 594-9057.
Contact HUD's National Servicing Center on line at: http://www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm
You can find FHA Mortgagee Letter 2005-45 online at: http://www.hud.gov/offices/hsg/mltrmenu.cfm
Form HUD-50012 can be found on Hudclips at: http://www.hudclips.org/sub_nonhud/html/pdfforms/50012.pdf