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12.2.4.2 Foreclosure Moratorium and Eviction Suspension

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HUD Handbook 4000.1 states that mortgages secured by properties in presidentially declared major disaster areas are subject to a ninety-day moratorium on foreclosures following the disaster.182 The moratorium applies both to “the initiation of foreclosures and foreclosures already in process.”183

Handbook 4000.1 states that “HUD provides the Mortgagee an automatic 90-Day extension from the date of the moratorium expiration date to commence or recommence foreclosure action or evaluate the Borrower under HUD’s Loss Mitigation Program.”184 While the mortgagee is granted this discretion, HUD itself often extends a foreclosure moratorium when a disaster is particularly severe.185

Handbook 4000.1 also states that the mortgagee “must take no action to initiate or complete foreclosure proceedings, after expiration of a disaster-related foreclosure moratorium, if such action will jeopardize the full recovery of a hazard or flood insurance settlement.”186 This directive may provide the borrower with an additional safeguard that applies even after the initial foreclosure moratorium ends.

The FHA foreclosure moratorium applies both “to the initiation of foreclosures and foreclosures already in process.”187 This means that any foreclosure moratorium will necessarily suspend and foreclosure evictions for the prescribed ninety-day period. In its Mortgagee Letters and press releases, HUD almost always refers to the foreclosure moratorium as a “Foreclosure and Eviction Moratorium,”188 making it clear that the moratorium terms apply equally to all foreclosure proceedings.

Footnotes

  • 182 U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii, Moratorium on Foreclosures.

  • 183 U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii, Moratorium on Foreclosures.

  • 184 U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii.A, Moratorium on Foreclosures.

  • 185 “HUD may communicate further specific guidance for extension of moratorium periods for individual disasters.” U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii.A, Moratorium on Foreclosures. See also U.S. Dep’t of Hous. & Urban Dev., Federal Hous. Admin. National Servicing Ctr., Servicing and Loss Mitigation for FHA-Insured Mortgages in Presidentially Declared Major Disaster Areas (PDMDAs) 6 (Sept. 4, 2020).

  • 186 U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii.C, Moratorium on Foreclosures.

  • 187 U.S. Dep’t of Hous. & Urban Dev., FHA Single Family Housing Policy Handbook 4000.1, III.A.2.n.ii.A, Moratorium on Foreclosures.

  • 188 See, e.g., U.S. Dep’t of Hous. & Urban Dev., Extension of Foreclosure and Eviction Moratorium in Connection with the Presidentially-Declared COVID-19 National Emergency, Mortgagee Letter 2020-43 (Dec. 17, 2020), available at https://www.hud.gov.