RHS established special relief measures for borrowers impacted by natural disasters. In addition to standard workout options, lenders and servicers may offer the special relief measures to assist eligible borrowers without the need to conduct a standard financial evaluation. Lenders and servicers may only offer the special relief measures if: the loan was current, or less than 30 days past due, as of the date of the disaster; the lender or servicer verifies that the borrower’s hardship (employment and/or property) has been resolved; and the total modified mortgage principal and interest payment is less than or equal to the payment prior to the modification. The special relief measures include: term extension/forbearance (if borrower is capable of maintaining current contractual payment, including any escrow shortage); capitalization of delinquency and term extension (if borrower is capable of maintaining current contractual payment, but not any additional escrow amount); and mortgage recovery advance (if the servicer is unable to offer the borrower a term extension/forbearance, or a capitalization of delinquency and term extension). The special relief measures must be offered in the order listed above. The special relief measures are effective immediately.
Click here to view the RHS – 3555 Handbook Update – Special Relief Measures for Natural Disasters
