Two Years Later…A Sandy Update
(Editor's Note: We first met the Burkhardts in early 2013 in the wake of Hurricane Sandy. Today, they still struggle with recovery, and their story is a poignant reminder that it's never too late to reach out to your mortgage company for advice on options following a devastating event.)
Like many New York area homeowners, the Burkhardts' lives were turned upside down in October 2012, when Hurricane Sandy devastated their beachfront apartment building in Rockaway Park.
While Robert and Meng Burkhardt heeded the warnings and safely evacuated the area with their 3-year-old son, they didn't foresee the second wave of disruption that would continue to impact their lives nearly two years later—juggling short-term housing costs along with their existing mortgage and maintenance payments.
Navigating the Waters
What the Burkhardts — along with many other homeowners — weren't aware of in the post-disaster shock was that borrowers often have options.
Jack Maloney, a foreclosure prevention specialist at Fannie Mae, recalls he was surprised by the lack of awareness among homeowners when he visited disaster relief sites set up by the Federal Emergency Management Agency (FEMA) after Sandy. "We thought people would be asking about mortgages, but they didn't," says Maloney. "What we saw at centers in Long Island, New Jersey, and other areas were that people were concerned about supplementary housing and where to get food."
Maloney visited coastal towns across New York and New Jersey that each suffered damage to more than 300,000 housing units from Sandy — the second most costly hurricane in U.S. history.
Conducting informational sessions at FEMA sites and nonprofit organizations, he discovered that even when people did contact their mortgage companies, they weren't getting the help they needed. "Typically, we found most of the [mortgage companies] were giving them three months off and then asking them for the whole three months to be made up the next month," says Maloney.
Adjustable Mortgage Terms
While each mortgage company can set its own policies for disaster relief, Fannie Mae has guidelines for mortgage companies that service the mortgages it owns.
Fannie Mae's relief guidelines to mortgage companies include:
- If you're current on your mortgage payments or less than three months delinquent, you could be eligible for up to 12 months of forbearance.
- If you have fallen behind on your mortgage payments for more than three months, you could still be eligible for up to six months of relief.
- Once the forbearance period has ended, you must repay the amount that was reduced or suspended. You can make a lump-sum payment or modify the mortgage, lengthening the term of the loan and moving the delinquent payments to the end of the mortgage term.
- If foreclosure proceedings have already begun, you may be eligible to have them suspended.
"Fannie Mae can work with people and their mortgage company to help them get the optimal modification for which they are eligible," says Maloney.
In the Burkhardts' case, they received a letter from a Fannie Mae Mortgage Help Center, and a housing advisor worked with their mortgage company to get them relief. The family is still staying in the rental as the repairs continue. "But the reprieve has made a big difference," says Meng.
Here are some additional resources for homeowners following a disaster:
- FEMA housing assistance
- Freddie Mac disaster relief policies
- FHA-backed loans, contact the U.S. Department of Housing and Urban Development.
VA-backed home loans, contact the U.S. Department of Veterans Affairs.