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.