FHA Allowing Additional Closing Time for Hurricane Sandy Victims

Due to the devastation caused by Hurricane Sandy for homeowners and businesses, the Federal Housing Administration (FHA) is granting additional time for the closing of loans for properties located in Presidentially-Declared Major Disaster Areas affected by that storm. The FHA has issued Mortgagee Letter 2012-23 to address these concerns. In cases where there is no expectation of a material change in the loan application documentation, lenders closing on loans for properties located in Presidentially-Declared Major Disaster Areas affected by Hurricane Sandy will be granted an additional sixty days for all documents in the mortgage loan application at closing beyond the 120 days for completed construction or 180 days for new construction set out at HUD Handbook 4155.1 1.B.1.h. This waiver applies to all case numbers assigned on or before Oct. 29, 2012, with a settlement date on or after Oct. 29, 2012, for properties located in Presidentially-Declared Major Disaster Areas affected by Hurricane Sandy. The FHA has also issued Mortgagee Letter 2012-22, "Revisions to FHA’s Loss Mitigation Home Retention Options. Mortgagee Letter 2012-22 includes revised requirements for FHA’s Loss Mitigation Home Retention Options, in an effort to reduce the number of full claims against the FHA Mutual Mortgage Insurance Fund by assisting a greater number of qualified, distressed mortgagors in retaining their homes. Mortgagee Letter 2012-22 amends the following: ►FHA’s Home Affordable Modification Program’s (FHA-HAMP) guidelines in Mortgagee Letter 2009-23; ►The definition of “Special Forbearance” in Mortgagee Letter 2002-17; and ►Loss Mitigation priority order guidelines in Mortgagee Letter 2000-05.