(Source: Senator Robert Menendez) -- U.S. Senator Robert Menendez, Chairman of the Senate Subcommittee on Housing, today praised HUD Secretary Donovan for moving forward on a series of measures to allow New Jersey homeowners impacted Super Storm Sandy to get back on their feet without having to face the prospect of foreclosure.
“This effort to help ease the burden of struggling New Jersey homeowners is a tremendous opportunity to provide relief from the fear of not only losing one’s home to the unavoidable forces of nature, but to the avoidable force of eviction,” said Senator Menendez. “Secretary Donovan and his staff on the Sandy Rebuilding Taskforce should be commended for this sensible solution that will not only keep families from facing the trauma of losing a home, but make staying in their homes more affordable through low-interest refinancing. I encourage the remaining parties, like the Federal Housing Finance Agency, Fannie Mae and Freddie Mac, as well as private banks to continue helping their borrowers to recover by following the FHA’s lead and extending loan relief as soon as possible.”
In the aftermath of Super Storm Sandy, FHA, the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac put in place foreclosure and eviction moratoriums on the initiation or commencement of foreclosure actions against homeowners whose properties were damaged or destroyed due to Super Storm Sandy. In January they extended the moratoriums, which apply to homeowners in Presidentially Declared Major Disaster Areas eligible for individual assistance, through April 30, 2013.
The Federal Housing Administration (FHA) has already instructed FHA-approved lenders to make every effort to communicate with and assist affected borrowers in rebuilding or repairing damaged properties, minimizing delinquencies and retaining their homes.
In addition to relief offered through HUD’s Loss Mitigation Program, today, FHA is expanding forbearance relief for affected borrowers. Under this policy:
Borrowers may suspend up to 12 months’ worth of mortgage payments while they repair their homes; and
After the forbearance period, borrowers may be eligible for an FHA streamlined loan modification to avoid large lump sum payments
Up to 285,922 borrowers in the Sandy-affected areas who were eligible for forbearance relief as of February 28, 2013, may be eligible for an FHA streamlined modification.
Source: Senator Robert Menendez