Rural Development requests that loan holders and servicers establish a 90-day moratorium from the date of this letter for initiating new foreclosures on loans that are secured by properties located in the counties that have been declared disaster areas due to the hurricane.  Although the loan holder is ultimately responsible for determining when to initiate a foreclosure, and for completing termination actions on a defaulted loan, Rural Development will appreciate efforts to help deserving borrowers maintain home ownership.  Since Rural Development is making this request, it will not apply the provisions of 7 CFR §1980.374, concerning the expeditious liquidation of loans, during the moratorium.  Also, if a qualified loan is ultimately liquidated, the period of the moratorium will be considered as "Rural Development-Requested Forbearance" when processing a loss claim.  Holders and servicers should ensure that a foreclosure on a loan scheduled in an affected county during the moratorium is reviewed before the foreclosure sale date to ensure that the borrower has been affected significantly enough to justify postponing or canceling the sale.

Rural Development also wishes to remind loan holders and servicers of their responsibilities to inspect properties that secure GRH loans for damages.  This is especially true if an appraisal or broker's price opinion was completed before the disaster, or when the county was declared a disaster area.

Questions regarding the issues addressed in this letter may be made to the staff of the Rural Development Single Family Housing Guaranteed Loan Division at (202) 720-1452.