The Federal Housing Administration gave borrowers afflicted by January’s wildfires additional relief on Thursday that will affect how servicers handle loans the government agency insures in parts of Southern California.
The Department of Housing and Urban Development affiliate has extended the moratorium on foreclosures for over 100,000 FHA-insured loans in communities within the presidentially declared disaster area through July 7 from a previous April 8 date.
Scott Turner, secretary of the Department of Housing and Urban Development, provided borrowers with more leeway after he toured the region with Los Angeles County Supervisor Kathryn Barger.
“Supporting our neighbors so they can build or rebuild their future, including when disaster strikes, is a core part of HUD’s mission and we will continue providing help during hardship,” Turner said in a press release.
A wildfire-related forbearance bill also is pending in the state legislature that would extend foreclosure protections for all loans for 180 days. Fannie Mae and Freddie Mac each have a policy for up to one year of forbearance for loans they buy.
Hundreds of state chartered institutions and five major mortgage companies have agreements with California Gov. Gavin Newsom to provide forbearance for all types of home loans in the fire area for at least 90 days.
The Palisades fire region had a 23.9% delinquency rate in February, according to a recent ICE Mortgage Technology report. The Altadena area neighborhoods hit by the Easton fire had a 16.7% delinquency rate.
Estimates for the dollar value of homes impacted by the fires have ranged from ICE Mortgage’s $11 billion for properties with debt to Moody’s nearly $16 billion for residential real estate in general. Broader estimates from Morningstar for damage to all property types exceed $30 billion.
