U.S. Senator Charles E. Schumer today called on banks to extend the mortgage payment delay period, also known as a forbearance period, for homeowners who are still feeling the effects of Sandy. After Sandy, many banks issued 3 - 6 month mortgage payment holidays -- meaning homeowners would not be penalized for missing payments - which have now expired or are about to expire. In addition to forbearance expiration, many banks are requiring homeowners to repay the missed months in one unaffordable lump sum payment.
Given that many residents in New York City and Long Island have expended all their resources making repairs to their homes and paying for a temporary place to live, Schumer today called on banks to extend their forbearance periods. He also called for them to allow homeowners the flexibility to repay the missed months over time or at the end of their loan period, instead of in one lump sum payment, which most could not afford. He said that no one should have their credit ruined or lose their home because they are the victims of a natural disaster. If banks extend their forbearance policies, homeowners are likely to have received the federal funds and can repay the mortgage payments.
Schumer stood alongside Carol Yopp of the Long Island Housing Partnership; Barbara Schaffer of Lindenhurst; Dawn and Chris Tesoro of Patchogue; Peter Chaplin of Massapequa; Kerry Abitabilo-Klein of Lindenhurst; Joan Ensalo of Lindenhurst and Christina Galante of Lindenhurst, who also represents the organization Adopt-a-House.
"Many homeowners have used every dime they have to repair their houses and put a roof over their homes, and don't have the resources to pay months worth of mortgage payments at one time," said Schumer. "Banks can help families, who have long made payments on time, bridge the gap between now and when federal aid arrives if they extend the payment holidays and provide some flexibility. Sandy devastated entire communities, and banks have the responsibility to help their customers through this difficult time."
Forbearance periods allow customers the opportunity to temporarily postpone mortgage repayments without being charged late fees. Due to Superstorm Sandy, many banks and mortgage lenders offered 90 to 180 day forbearance periods for customers seeking assistance, but that period has now expired or is about to expire.
Fannie Mae and Freddie Mac recently extended their forbearance periods from 90 days to 180 days to further help individuals impacted by Superstorm Sandy, and Schumer today called on banks to adopt Fannie Mae and Freddie Mac's forbearance policy by extending the period for individuals still affected by Sandy.
Schumer made the case that many residents throughout New York City and Long Island are still feeling the effects of Sandy and the expired forbearance periods mean that homeowners will have to pay this month's payment in addition to the prior month's payment. Schumer pointed to homeowners who are still making repairs to their damaged homes and awaiting insurance money as well as federal assistance. Schumer noted that many homeowners were forced to use the money they saved from the forbearance period towards making repairs and that an extension of this forbearance period would help homeowners get back on their feet.