With President Trump issuing a disaster declaration for Kerr County, Texas, over the weekend, a 90-day foreclosure moratorium on properties backed by Federal Housing Administration mortgages took effect immediately. Servicers are prohibited from taking foreclosure action on all units with associated single-family FHA-guaranteed loans, including Home Equity Conversion Mortgages.

The department, which oversees the FHA-lending program, estimates more than 900 of its borrowers lie in the designated disaster area. 

"The flash floods have claimed the lives of more than 100 Americans and displaced countless others. It is an unfathomable tragedy, and HUD will continue to provide resources and support as we pray for the Texas Hill Country community," said department Secretary Scott Turner in a press release. 

FHA advised borrowers in the disaster zone to contact their servicers if the event posed payment obstacles. The office noted its borrowers have 100% financing available through its 203(h) program for reconstruction of stricken properties necessitating complete replacement. 

Severe storms and flooding hit communities across the Hill Country, near Austin and San Antonio, over the July 4th weekend, leading to as much as 20 inches of rain in some flood-prone locations, more than double the forecasted amount. Extreme weather also led rivers to rise by well over 20 feet in some spots. Officials confirmed at least 109 deaths by Tuesday afternoon, with dozens still unaccounted for.

Government-sponsored enterprises Fannie Mae and Freddie Mac similarly advise mortgage borrowers in need of assistance to speak with their servicers following major natural disasters. Borrowers affected by extreme weather with loans guaranteed by the enterprises typically can obtain up to a full year of forbearance protection and waivers of penalties and late fees.

On Monday, the Office of the Comptroller of the Currency likewise declared the flooding an emergency condition, authorizing local financial institutions it oversees to temporarily close as needed. OCC's guidance also loosens some regulations to permit banks to quickly offer customers assistance, including loan restructuring and expedited decision making, under emergency contingencies.    

How lenders and related businesses have responded 

In the days since the floods, several businesses, including mortgage lenders with large operations in the state, stepped in with charity drives and initiatives to support their neighbors. 

Fairway Home Mortgage, which has one of two national headquarters located in Carrollton, Texas, announced it would provide $1 million for local relief efforts and called on other lenders to make similar moves. Fairway made the donation through its Texas nonprofit partner, Wood Group Gives. 

"We always pay lip service to how we are here to help and to serve, but it is times like this when Fairway really steps up and shows its true colors. We hope other companies react in the same way," said Fairway senior vice president and area manager Brad Dragoo in a press statement. 

Texas-based University Federal Credit Union began collecting public donations of essential disaster-relief items, including food, first aid, lighting and cleaning supplies, at its branches in the greater Austin area. It also directed its affected mortgage borrowers in need of payment assistance to its servicing partner. 

Renovation and construction supply chain Home Depot pledged $250,000 to support emergency efforts through its philanthropic foundation. That organization will work with nonprofit partners to deliver supplies and meals to people in need.