FDIC, HUD announce disaster relief guidance for Iowa, California borrowers
On August 26, the FDIC issued FIL-81-2020 to provide regulatory relief to financial institutions and help facilitate recovery in areas of Iowa affected by severe storms. In the guidance, the FDIC notes that, in supervising institutions affected by the severe weather, the FDIC will consider the unusual circumstances those institutions face. The guidance suggests that institutions work with impacted borrowers to, among other things, (i) extend repayment terms; (ii) restructure existing loans; or (iii) ease terms for new loans to those affected by the severe weather, provided the measures are “done in a manner consistent with sound banking practices, can contribute to the health of the local community and serve the long-term interests of the lending institution.” Additionally, the FDIC notes that institutions may receive Community Reinvestment Act consideration for community development loans, investments, and services in support of disaster recovery. The FDIC states it will also consider relief from certain filing and publishing requirements.
Separately, on August 25, HUD announced it will expedite disaster assistance to certain counties impacted by the California wildfires, which will provide foreclosure relief and other assistance to homeowners living in the counties. Specifically, HUD is providing an automatic 90-day moratorium on foreclosures of FHA-insured home mortgages for covered properties and is further making FHA insurance available to those victims whose homes were destroyed or severely damaged. Additionally, HUD’s Section 203(k) loan program will allow victims to finance the purchase or refinance of a house along with the costs of repair through a single mortgage, and will also allow homeowners with damaged property to finance the rehabilitation of their existing single-family homes.
Find continuing InfoBytes coverage on disaster relief guidance here.