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HUD Rule Provides Temporary Relief to Tornado-Related Foreclosures, Legal Aid Advises

Tuesday, July 16, 2013

  • Legal Aid Services of Oklahoma

Legal Aid is advising homeowners in six central Oklahoma counties hit by tornadoes, flooding and severe storms in May and June that the foreclosure process on FHA-insured homes is in a 90-day grace period, whereby no new foreclosures can be started and actions in progress must be held in abeyance. The hold, issued in HUD Mortgagee Letter 2013-11, applies to foreclosures in Canadian, Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties, all designated disaster areas by the federal government.

“The 90-day hold on foreclosures provides disaster victims the needed time to regroup and recover,”  said Michael G. Figgins, Executive Director of Legal Aid Services of Oklahoma (LASO).  LASO is working hard to help disaster victims sort out legal details and ensure protection of their legal rights,” Legal Aid is part of the Multi-Agency Resource Center (MARC), established to provide emergency and long-term assistance to tornado victims in Moore, Shawnee, Little Axe and other affected areas, said Figgins.  Legal Aid is providing tornado and storm victims and families legal assistance concerning housing-related problems as well as other legal issues they are facing.

Legal Aid Services of Oklahoma is a not-for-profit law firm providing free civil legal assistance to eligible low-income individuals and their families and to elderly persons in the areas of family, consumer, housing, health and employment.  Legal Aid attorneys and staff work through a network of fully-staffed law offices and satellite offices, serving eligible clients in all 77 counties of Oklahoma.  The statewide toll-free number to call for legal assistance is 1-888-534-5243.         

Funding for Legal Aid is from the Legal Services Corporation, State of Oklahoma, Oklahoma Bar Foundation,16 United Way or United Fund organizations and aging agencies across the state, as well as generous attorneys, law firms, foundations, businesses and individuals.          

For more information on Legal Aid Services of Oklahoma and the services it provides, contact Executive Director Michael Figgins at More information on LASO is available online at


Major Provisions of HUD Mortgagee Letter 2013-11

The U. S. Department of Housing and Urban Development (HUD) in April clarified its standards on foreclosures of properties in Presidentially-Declared Major Disaster Areas and froze foreclosures on FHA-insured properties for a ninety (90) day period beginning on the date of each Disaster Area Declaration. The hold applies to the initiation of foreclosures and foreclosures already in process in six central Oklahoma counties impacted by tornadoes, flooding and storms on May 20, May 28 and June 2, which include Canadian, Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties. Below are highlights of major provisions of HUD Mortgagee Letter 2013-11.

Loss Minimization

When it applies, lenders must provide borrowers with loan forbearance and other alternatives to minimize loss. You are eligible for these alternatives if

  • The mortgaged property was your primary residence,
  • You are not behind more than 12 months worth of payments in money owed, interest, taxes, and insurance,
  • And you intend to return to your property as soon as you are able.

Suspension of Reporting to Collection Agencies

Loan companies should wait to report those who are delinquent to collection agencies for borrowers who are granted disaster related mortgage payment relief and are otherwise paying as agreed, unless it is required for a loan modification.

Waiver of Late Charges

Lenders should waive late charges as long as the borrower is on a forbearance plan or paying as agreed on an alternative to minimize loss plan.

Monitoring Repairs to Substantially Damaged Homes

Lenders must take appropriate actions to ensure that repairs to substantially damaged properties comply with the applicable building elevation standard.

Flood Damage

For new FHA-insured mortgages and substantial change on existing mortgages, FHA requires that for proposed construction and repair of substantially damaged properties located in a Presidentially-Declared Major Disaster Area, the lowest floor be elevated at or above the Base Flood Elevation based on the most recent FEMA data, plus one foot of freeboard. The most recent FEMA data includes Advisory Base Flood Elevations or Preliminary Flood Insurance Rate Maps. The lowest floor should never be below the Base Flood Elevation on the current adopted Flood Insurance Rate Map.


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