A U.S. Housing and Urban Development rule is shielding some Oklahoma property owners from foreclosure proceedings as they deal with the fallout of this year's devastating tornadoes.
Lenders on Federal Housing Administration-insured properties cannot start foreclosure proceedings for 90 days after a presidential disaster declaration. President Barack Obama has declared a disaster for six Oklahoma counties since the massive May 20 tornado that hit the Moore area.
Michael Figgins, executive director of Legal Aid Services of Oklahoma Inc., said he is worried some lenders are not heeding the HUD rule on foreclosures in disaster areas. Legal Aid issued an advisory this week to bring attention to the foreclosure moratorium.
“The 90-day hold on foreclosure provides disaster victims the needed time to regroup and recover,” Figgins said.
He said there are probably a lot of people in the affected areas in Oklahoma, Cleveland, Canadian, Lincoln, McClain and Pottawatomie counties with FHA loans. Such loans typically are sought by people who do not qualify for prime mortgage rates or want lower down payments.
Figgins said the HUD rule covers delinquent FHA loans that could be referred to a collection agency.
“That's the last things these folks need is somebody calling, somebody writing and making all kinds of threats,” he said. “The whole point of this is to give folks that time to regroup and rebuild.”
“Obviously catastrophes happen and they need time to sort things out.”
Figgins said he is concerned Oklahoma property owners may be getting improper collection notices.
“They should be quiet right now through Aug. 20,” he said.
A HUD spokeswoman in Fort Worth said property owners should direct complaints about foreclosure proceedings instituted after the Oklahoma tornadoes to their lenders. The agency also has a national servicing center in Oklahoma City. It can be reached at (877) 622-8525.
Figgins said Legal Aid, a nonprofit law firm providing free civil legal assistance to qualified individuals, can help also.
Legal Aid Services of Oklahoma “is working hard to help disaster victims sort out legal details and ensure protection of their legal rights,” he said. Legal Aid's number is (888) 534-5243.