Managing Your Home Loan After Hurricane Sandy

Photo courtesy of Greta Ceresini

With all of the property damage caused by Hurricane Sandy, homeowners who were in her path are facing problems that extend far beyond cleaning up and drying out. Job loss due to destruction of workplace buildings and excessive amounts of money spent on repairs are just two of the reasons that many Sandy victims are falling deeper and deeper into debt.

One way to soften the blow a little bit is to apply for a home loan modification. People living in the path of Hurricane Sandy are currently being given special considerations for mortgage adjustments with the intention of lowering their monthly  payments.  This will hopefully prevent many homeowners from facing a dreaded foreclosure and will keep them in their beloved homes. Some banks have automatically suspended all current or potential foreclosures in locations that were declared Hurricane Sandy disaster areas by FEMA.

Additionally, some mortgage lenders like Fannie Mae and Freddie Mac have given temporary mortgage payment breaks for their customers who were affected by the hurricane. This assistance comes in the form of forbearance plan. A forebearance plan is basically an agreement that a mortgage lender creates with borrowers who have encountered significant problems which have caused them financial difficulties, like serious health issues, temporary unemployment or natural disasters like Hurricane Sandy. In a forebearance agreement, the lender states that they will not force the borrower into foreclosure as long as the borrower promises to bring their payments current by the end of the term of the agreement.  Naturally, this isn’t a long-term solution, but it offers homeowners a temporary reprieve as they recover from natural disasters. Forebearance agreements usually last for approximately ninety days.

If your mortgage lender doesn’t seem willing to offer you a forebearance, you have several options. Your first option is to contact your lender and ask them directly if they will consider formulating a forebearance plan for your mortgage. Depending on your lender, this might actually work.  If contacting them proves unsucessful, have your collections attorney give them a call. Many times, banks and lending institutions will respond quickly when your attorney gets involved.

If a forebearance plan is out of the question, your second option is to apply for a loan modification, which will make changes to the original terms of your mortgage contract. These changes will be agreed to by you and your lender and may start out on a trial basis but become permanent once you show that you can successfully make the lowered payments on time. Loan modifications can include changes to your interest rate and the length of your loan with the intention of lowering your montly payment so that you can better afford it.

Ultimately, as you work hard to recover from the effects of Hurricane Sandy (or any natural disaster that may have unfortunately come your way) – keep in mind that you do not have to lose your home because of your temporary inability to make your mortgage payments.  There are solutions that were created specifically for the situation that you are currently facing, and you can take advantage of them on your own or with the help of a law firm that specializes in collections or loan modifications.

Advertisements

One Response to Managing Your Home Loan After Hurricane Sandy

  1. Pingback: Property Tax Appeals After a Natural Disaster « Veitengruber Law

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: