HUD released Mortgagee Letter 2006-05 extending the foreclosure moratoriums for areas eligible for individual assistance in Louisiana, Mississippi, Alabama and Florida as a result of Hurricane Katrina, Rita or Wilma for an additional 120 days.

To view the complete mortgagee letter, click the following link:

HUD Mortgagee Letter 2006-05

Following is a brief summary of the mortgagee letter release:

By March 31st, 2006 the mortgagee must:

• Assess the status, condition, and habitability of the mortgaged property;
• Establish contact with borrowers and evaluate their short term and long term plans for housing, employment, home repairs and repayment of the mortgage debt;
• Complete a determination of the borrower(s) hazard and flood insurance coverage, property damage and available insurance recoveries;
• Confirm in writing that the borrower intends to work with the mortgagee to develop and implement a plan to repair or rebuild the home and resolve the mortgage delinquency.

If, by March 31, 2006, the borrower provides a written commitment to work with the mortgagee to develop and implement a plan to resolve the mortgage delinquency, the time to initiate foreclosure will automatically be extended an additional 90 days to June 30, 2006.

The foreclosure moratorium will terminate on March 31, 2006, for all loans where the borrower has not made a written commitment.