USDA Technical Handbook HB-1-3555 §18.15 — Special Relief Alternatives For Disaster Assistance
USDA HB-1-3555 §18.15 (Special Relief Alternatives For Disaster Assistance). Gap-fill (verbatim).
Verbatim regulatory text
Verbatim provisions from USDA Technical Handbook HB-1-3555 §18.15 — Special Relief Alternatives For Disaster Assistance — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555 18.15 — Special Relief Alternatives For Disaster Assistance
ECIAL RELIEF ALTERNATIVES FOR DISASTER ASSISTANCE In addition to the standard workout options in
USDA HB-1-3555 18.15 — Special Relief Alternatives For Disaster Assistance
8-A, The Loss Mitigation Guide, servicers may offer the following special relief alternatives depending on the borrower’s circumstances. A. Special Relief Alternatives: Borrowers must meet all the following eligibility criteria: x The borrower occupies, as their primary residence, the property securing the guaranteed loan. x The loan was current or less than thirty (30) days past due as of the date the
USDA HB-1-3555 18.15 — Special Relief Alternatives For Disaster Assistance
04-14-25) PN 637 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. applicable PDD was declared. x The servicer receives verification from the borrower the hardship (employment and/or property) has been resolved. x The total modified mortgage principal and interest payment is less than or equal to the payment prior to modification. If the borrower meets the conditions above, the servicer may offer any one of the following options with no financial review: x Payment Deferral: If the servicer determines the borrower can maintain the current contractual payment including any escrow shortage created by advances during the forbearance period, spread over 60 months, the missed payments may be deferred to the end of the loan term. USDA does not allow any type of balloon payment as part of the guaranteed UPB. Therefore, the term must be extended along with the deferral, thus allowing the borrower to make regular payments until the deferred balance is paid in full. Any interest accrued during the forbearance period should be included in the deferred balance. x Capitalization of Delinquency and Term Extension: If the servicer determines the borrower can maintain the current contractual payment but cannot manage the additional escrow repayment amount, the servicer may offer a “Cap and Extend Modification” under the following terms: o Capitalize the accumulated arrearages and eligible unreimbursed servicer advances, fees, and costs into the modified mortgage balance. o Extend term for a total of up to 360 months. o Modify the interest rate to no more than 50 basis points greater than the most recent Freddie Mac Weekly Primary Mortgage Market Survey (PMMS) Rate for 30-year fixed-rate conforming mortgages (U.S. Average), rounded to the nearest one-eighth of one percentage (0.125%), as of the date a plan is offered to the borrower.
USDA HB-1-3555 18.15 — Special Relief Alternatives For Disaster Assistance
04-14-25) PN 637 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts. x Mortgage Recovery Advance: The servicer may utilize a Mortgage Recovery Advance (MRA) to settle the borrower delinquency and bring the borrower current. The MRA is limited to an amount no greater than what is necessary to resolve any accumulated delinquency and unreimbursed servicer advances made during the forbearance and must meet all other requirements as explained in Section 5(J) of the Loss Mitigation Guide found in Attachment 18-A of this Chapter.
USDA HB-1-3555 18.15 — Special Relief Alternatives For Disaster Assistance
OPERTY DAMAGE AND INSURANCE CLAIMS [7 CFR 3555.307(d)] Servicers should ensure that hazard insurance claims are filed and settled as expeditiously as possible. Servicers are responsible for taking prompt action to protect the interests of the borrower and Agency when a hazard or flood occurs. This involves working closely with the insurance carrier, the borrower, and repair contractors. The servicer will complete a thorough analysis concerning the decision to repair the security property and document the decision. The decision should support the best level of return to the servicer and minimize loss to the Agency. Insurance proceeds will be issued jointly to the servicer and the borrower. If the decision is to use the proceeds to repair the property, the servicer must ensure a licensed contractor is used to complete the repairs. Unless the homeowner qualifies for direct payment of insurance proceeds in accordance with of Chapter 17 of this Handbook, the servicer will release the proceeds in draws based on periodic inspections. The final draw will be paid after verification that all repairs were satisfactorily completed. The servicer is responsible for obtaining all lien waivers for work performed. If the premises have been destroyed, the servicer should compare the unpaid principal balance with the insurance proceeds and any other circumstances affecting the case, such as local laws barring reconstruction of the destroyed property. Insurance loss payments, condemnation awards, or similar proceeds will be applied on debts in accordance with lien priorities, on which the guarantee was based, or to rebuild or otherwise acquire needed replacement collateral.