Can I Receive Hurricane Sandy Forbearance if I Filed for Bankruptcy?

Homeowners in New Jersey and all along the Atlantic coast will be hard-pressed to ever forget Hurricane Sandy – a deadly “superstorm” that hit the eastern seaboard in October of 2012. Assessed as the second-costliest hurricane to ever hit the United States, estimates of Sandy’s damage (in the US alone) are approximately $72 billion. The only hurricane in US history to cause more damage was Hurricane Katrina.

New York and New Jersey were the hardest hit states, with gale force winds that reached 90 mph and heavy rain (up to 12 inches in some locations) which led to flooding and significant structural damage of homes, businesses, beaches, boardwalks, roads, and more. Power outages were widespread and lasted for weeks in some places. For the first time since 1888, the New York Stock Exchange closed (on October 29 and 30) due to weather. Even Halloween was postponed in New Jersey, much to the chagrin of kids across the state.

As we hyper-focus on the damage done by Hurricane Sandy to New Jersey alone, we know that nearly 400,000 homes suffered damage from the storm, many were without power for an extended period of time, and 37 people died.

Relief efforts to clean up and rebuild the damaged areas of New Jersey were impressive, and some (but not enough) federal aid monies were approved for the state. Some of that federal aid was disbursed extremely slowly which means the aftermath of Hurricane Sandy is still felt today, nearly five years after the storm.

Residents along the New Jersey shore sustained the most damage – both from flooding and high winds – to their homes and properties. The fact that five years has passed should mean that everyone in NJ has recovered from the storm; unfortunately that just isn’t the case. Although many people and organizations dedicated extraordinary man hours and donations toward the recovery effort, there are homeowners who still remain displaced and/or are facing foreclosure.

The good news is that Governor Christie recently signed a bill (S-2300, A-333) that will potentially offer some much needed help to those who are still struggling post-Sandy. The bill specifically grants Sandy victims with a mortgage forbearance period of up to three years. In order to receive the forbearance, homeowners must have been approved for help via the Reconstruction, Rehabilitation, Elevation and Mitigation Program OR the Low-to-Moderate Income Program.

Affected NJ homeowners struggled for years trying to rebuild their homes after Sandy. Without enough funds to make their homes habitable again, a multitude of these residents had to rent alternative housing. Paying rent while still paying the mortgage on their now damaged property pushed many homeowners into bankruptcy.

Many homeowners filed for the protection offered by the Automatic Stay in the hopes that funding would be released before their bankruptcy case was finalized. Not realizing how long it would take for federal relief funds to be released, their bankruptcy cases ended long ago, and many of the homeowners chose not to reaffirm their mortgages.

Now that bill S-2300, A-333 has been signed, those who filed for bankruptcy and didn’t reaffirm their mortgages are wondering if they still qualify for forbearance. The good news is that a lender may not require that a mortgage be reaffirmed in order for the mortgage holder to receive forbearance.

Homeowners who’ve filed for bankruptcy without reaffirming their mortgages may have to provide their lender with a letter acknowledging that the mortgage debt was discharged in bankruptcy. This protects lenders/creditors from worrying that they’ll be sued when they try to collect on the debt again.

It’s very possible that lenders will not feel comfortable discussing the matter directly with the homeowner. They don’t want to seem as though they are breaking bankruptcy law by attempting to collect on a discharged debt. In this case, borrowers should work with a bankruptcy or foreclosure attorney in New Jersey to negotiate with their lender on their behalf.

 

Image: “Crooked House” by Don McCullough – licensed under CC by 2.0

1/3 of Sandy Victims are Still in Desperate Need of Help

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With Hurricane Joaquin baring down on us, we are coincidentally approaching the three year mark since Hurricane Sandy whipped through the Northeast in October 2012. What you may be surprised to learn is that a full 30% of homeowners affected by the 2012 storm are still in dire financial straights. Many are not yet able to live in their homes and are paying both the home mortgage and the cost of a rental so they have somewhere safe to stay.

The reason so many homeowners are still displaced this long after Sandy? Many insurance companies offered up piddly settlements and told homeowners to “rebuild.” The advice of NJ governor Chris Christie was to “rebuild now.” Because of the low ball insurance pay outs and a desire to get back into their homes, many homeowners dug into their savings and retirement funds to repair the damage done by Hurricane Sandy.

As if that weren’t bad enough, when FEMA finalized their new flood maps for the area, many of the homes that had been repaired were required to be elevated due to their proximity to the ocean. At that time, many homeowners threw up their hands with no idea how to pay for additional renovations.

These homes needed serious work in order to meet FEMA flood guidelines, so homeowners who did invest in the elevation renovations had to once again vacate their homes. The extended timeline for getting homes “up to par” after Sandy has caused missed mortgage payments as homeowners were forced to live (and pay for) rentals. Consequently, many of these homes’ lenders are moving toward foreclosure.

Of those people who are still dealing with severe financial distress, foreclosure (and potential bankruptcy) due to Hurricane Sandy, many are single parents, retirees, and economically challenged families who were struggling before Sandy hit.

There are two proposed bills (in Assembly and Senate) that are slated to be voted on by the end of 2015. These bills are aimed at banks and lenders who are foreclosing on vulnerable homeowners made even more vulnerable by a natural disaster. The goal of these bills is to keep banks from filing for foreclosure on Sandy affected homes that are enrolled in the RREM (Reconstruction, Rehabilitation, Elevation & Mitigation) program for at least 60 days after homeowners are able to move back in.

These proposed bills (if passed) will give homeowners a chance to bounce back – a full two months of “only” paying for one living space rather than a mortgage and a rental. If, after 60 days of moving back in, the homeowner is still delinquent on their mortgage, banks may then resume the foreclosure proceedings.

Although the bills are on the right track, there are still many homeowners who are not enrolled in RREM or LMI (Low & Moderate Income) programs. For example, in order to be enrolled in either of those programs, the property in question must be the homeowner’s primary residence. There are a plethora of damaged rental homes along the Jersey shore whose owners who can’t afford to make the necessary repairs, and because they don’t qualify for RREM or LMI, any new legislative acts won’t help them either.

If you’ve been affected by Hurricane Sandy or another natural disaster and your lender is attempting to foreclose on your property, know your rights. Don’t lose your home if you don’t want to! Find out how the right New Jersey foreclosure defense team can make all the difference in your quest to keep your home.

Image credit: DvidsHub (The damage shown was caused by Hurricane Sandy.)

Property Tax Appeals After a Natural Disaster

Photo courtesy of Raquel Baranow

With all of the property damage caused by Hurricane Sandy, most people in affected areas are still working hard to bring their homes back to their former beauty. It may seem hard to believe for those who are somewhat removed from the situation, but many New Jersey towns unfortunately have quite a few residents whose houses and properties were essentially ruined. Now it’s been nearly a month since Sandy blew through town. Homeowner’s or Flood Insurance claims have been filed, damage has been mostly cleaned up, and rebuilding is starting to take shape.

Homeowners in towns like Asbury Park, Point Pleasant, Manasquan, Avon, Allenhurst, and so many others along the New Jersey coastline who have suffered property damage may be coming to some harsh financial realities. Although helpful, insurance just isn’t going to pay for all of the bills that are starting to pile up. As homeowners and business owners reach this conclusion, they are left scratching their heads about what else can be done.

Many home mortgage lenders are seeing an influx in applications for loan adjustments, and many are responding with forebearance plans. In a forebearance plan, lenders agree not to force borrowers into foreclosure as long as they bring their loan payments current by the end of the term of the plan. In addition to loan modifications, New Jersey residents have another avenue to travel down if their home, business, building, or property of any type sustained damage due to Hurricane Sandy.

New Jersey law, specifically statute N.J.S.A. 54:4-35.1, states: “When any parcel of real property contains any building or other structure which has been destroyed, consumed by fire, demolished, or altered in such a way that its value has materially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casualty, which depreciation of value occurred after October first in any year and before January first of the following year, the assessor shall, upon notice thereof being given to him by the property owner prior to January tenth of said year, and after examination and inquiry, determine the value of such parcel of real property as of said January first, and assess the same according to such value.”

What that means in layman’s terms is that property taxes are based on the value of a piece of land and the building(s) on that land. If any of those buildings were damaged so much that their market value has decreased, the homeowner or business owner is entitled to owe less in property taxes. In the case of Hurricane Sandy, commercial and residential property owners must make a request to have their tax assessor revalue their property by January 9, 2013.

It is possible that you may be required to attend a public hearing at your County Board of Taxation, and in this case it is highly recommended that you retain the services of an attorney and be sure that he or she is in attendance with you at the hearing.  Look for an attorney who specializes in real property or real estate, and ensure that he or she is licensed to practice law in New Jersey. All businesses aside from sole proprietorships are required to be represented by an attorney at the public hearing level.

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.

Did Hurricane Sandy Push You into Bankruptcy?

Photo courtesy of DvidsHub

If you were in the direct path of the eye of Hurricane Sandy, chances are good that your property was damaged in some way. Many people suffered from the effects of high winds that caused structural damage to their homes, while others closest to the coast or in low-lying areas were inundated with flood waters. Some people are now dealing with the aftermath of both wind and flood damage, and some homes were quite simply annihilated. What this means for quite a large number of people is that their homes aren’t the only things that were ruined.

As the relief efforts to restore areas damaged by Hurricane Sandy reach their limits, residents are starting to assess their own financial ability to finish what the volunteers have started.  For more than a few people, the outlook is grim.

Passionate volunteer groups like Kiwanis Club of New Jersey Young Professionals and the American Red Cross have done and continue to do what they can in terms of clean up and donations to the families who were displaced due to the storm. However, as most residents are now realizing, there is only so much that even the most passionate donors and volunteer groups can do. There is a limit to the help that can be given, even though these groups would do more if they could.

The combination of the assistance that has graciously been given by groups from around the country plus the financial aid of homeowner’s insurance has helped so many people get back on their feet.  Some people, however, were struggling before the storm hit, and are now finding it next to impossible to get back to anywhere near ‘normal.’ If you fall into this group, and you simply can’t seem to recover from the effects of this storm no matter how much help you have been given, it’s time to consult a bankrupcy attorney to see what your options are.

If you were struggling financially before Sandy, rebounding is going to be extra tough. Were you out of work prior to the storm? Maybe the effects of the storm put you out of work because your place of business was destroyed. Although it’s true that the storm created some temporary work in terms of relief efforts, many jobs were simply erased because of office buildings/restaurants/factories being damaged beyond repair.  Many of these businesses are now declaring bankruptcy, and maybe you should, too.

If you’ve given it the old college try, and you can’t seem to pull yourself above the figurative water line, you’ll need to talk to someone who knows first-hand what you’ve been going through.

Here at Veitengruber Law, not only are we located directly in Sandy’s path, but our employees were part of the volunteer relief efforts.  We experienced the storm and the aftermath first hand, and we also know how to help you recover further by wiping your debts clean and starting fresh.

If Sandy’s got you in dire straights, rest assured that we can help you get back on the path to a normal life again. We’re also willing to waive our consultation fee for anyone affected by the storm. We’re here to help, in more ways than one.