Last week, President Obama issued a disaster declaration for South Dakota's Brookings, Lake, Moody, and Union counties, as well as for the Flandreau Santee Sioux Tribe. Severe storms and flooding that occurred in late September caused significant property damage in the areas.
The U.S. Department of Housing and Urban Development (HUD), in turn, has instructed lenders to grant a 90-day moratorium on foreclosures and forbearance on foreclosures of Federal Housing Administration (FHA)-insured home mortgages affected by the storms.
The Federal Deposit Insurance Corp. (FDIC) has similarly encouraged banks to work with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather. Lenders may extend repayment terms, restructure existing loans or ease terms for new loans, the FDIC says.
HUD also notes that it is making mortgage insurance available through the agency's Section 203(h) and 203(k) programs. Section 203(h) provides FHA insurance to disaster victims who have lost their home and decide to rebuild or buy another home. Section 203(k) enables borrowers who have lost their homes to purchase or refinance a house and finance its repair through a single mortgage.