The devastating fires in Los Angeles County prompted the Federal Housing Administration to publish FHA Info #2025-07 as a reminder to mortgagees about its guidance for servicing and originating FHA-insured mortgages in Presidentially Declared Major Disaster Areas (PDMDA).
- FHA provides HECM mortgagees an automatic 90-day extension from the date of the PDMDA foreclosure moratorium expiration date to commence or recommence a foreclosure action.
- HECMs that become due and payable for reasons other than the death of the last surviving borrower and eligible non-borrowing spouse are subject to a 90-day extension of HECM foreclosure timelines.
- All properties with pending mortgages or endorsements must have a damage inspection report that identifies and quantifies any dwelling damage.
- The damage inspection report must be completed by an FHA Roster Appraiser even if the inspection shows no damage to the property, and the report must be dated after the Incident Period (as defined by the Federal Emergency Management Association) or 14 days from the incident period start date, whichever is earlier.
- If the effective date of the appraisal is on or after the date required above for an inspection, a separate damage inspection report is not necessary.
- All damages, regardless of amount, must be repaired by licensed contractors or per local jurisdictional requirements, and the property must be restored to pre-loss condition with appropriate and applicable documentation.
Go deeper: Mortgagees are encouraged to review the servicing guidance outlined in Handbook 4000.1, Section III.B.3.a, relating to HECMs in PDMDAs. This section begins on page 1,556.
Members can also watch a video recording of the webinar organized by NRMLA last fall that examined the procedures for handling lost draft and property insurance claims following a natural disaster. The servicers who participated in the webinar offered helpful advice that you can share with clients who need help.
