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12.2.7.2 Moratorium

The HB-1-3555 Handbook mandates that servicers of RD’s single-family guaranteed loans suspend all foreclosure-related actions for ninety days from the date of declaration unless extended by the agency. This includes the initiation of new foreclosures as well as foreclosures already in process. To be eligible for a suspension of foreclosure activities, the property or the borrower’s place of employment must be directly affected by the disaster.240

The HB-1-3555 Handbook provides that a servicer should conduct regular follow-up during a foreclosure suspension and should reassess the borrower’s circumstances, based upon property inspections and the borrower’s financial information at the end of the suspension period. If the servicer is not actively engaged in workout options with the borrower and believes that suspension beyond the ninety-day period is advisable, the servicer must document the reason to extend a hold on all foreclosure actions and retain the documentation in its collection systems.241

Footnotes

  • 240 See U.S. Dep’t of Agriculture, Rural Development, SFH Guaranteed Loan Program Technical Handbook HB-1-3555, § 18.14, Special Relief Measures. See also 7 C.F.R. § 3555.307(c).

  • 241 See U.S. Dep’t of Agriculture, Rural Development, SFH Guaranteed Loan Program Technical Handbook HB-1-3555, § 18.14, Special Relief Measures. See also 7 C.F.R. § 3555.307(c).