On Friday morning, Rep. Carolyn Maloney (NY-12) joined U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan who leads President Obama's Hurricane Sandy Rebuilding Task Force and Senator Charles E. Schumer for the announcement that homeowners with federally-backed mortgages who suffered damage to their homes as a result of Superstorm Sandy will be granted an extended forbearance. When the current forbearance period expires at the end of this month, these families will be able to sign up for a streamlined mortgage modification that allows them to make manageable payments over the next year.
"This policy announcement shows extraordinary vision from the Obama Administration and HUD Secretary Shaun Donovan," Maloney said. "I was thrilled by the President's selection of Secretary Donovan to direct the Hurricane Sandy Rebuilding Task Force because as a native New Yorker, we could not ask for a stronger advocate during the difficult recovery process.
"Extended forbearance will bring relief to homeowners who have experienced financial hardship since Sandy. So many people lost their homes, possessions or jobs, entire communities were destroyed and in some tragic cases, people lost their lives. I am glad that we are making a commitment which will give nearly 300,000 families throughout the United States who lived in the path of this catastrophic storm much-needed support. This is truly a creative and innovative policy that will allow homeowners to pursue a customized path to financial stability while they are rebuilding their homes without dealing with the usual red tape. It has the added benefit of being deficit-neutral, and allows families to stay in their homes beyond the end of this month. This program will help rebuild houses, lives and communities.
"I would like to sincerely thank Secretary Donovan for his leadership and compassion during what has been a difficult five months for many New Yorkers. Sandy victims desperately need help from Washington, and I am proud to join the announcement of this crucial step on the road to recovery. The nightmare of Sandy is no longer on the front pages, but for many it is far from over. Affecting 1/6 of the nation's area, Sandy will be remembered as one of the largest storms our country has experienced. I believe that the collaborative storm response from government agencies is also one for the history books."
The Federal Housing Authority (FHA) has issued a Mortgagee Letter to homeowners living in Presidentially Declared Major Disaster Areas affected by Superstorm Sandy. This letter outlines the FHA policy that allows for mortgage payments to be suspended for an additional 12 months after the current forbearance period expires at the end of April. To avoid a large payment at the end of the year, homeowners can go through a streamlined loan modification process. HUD estimates that up to 285,922 borrowers are currently eligible to take part in this program.