According to the U.S. Department of Housing Urban and Development (HUD), if you are unable to pay your mortgage because of a natural disaster, there may be relief available to you. Lenders can stop or delay foreclosure for 90 days and also waive any fees.
What type of mortgage do you have?
First, the type of assistance that may be available depends on the type of mortgage you have. According to the Home Buyer Institute, there are different types of loans, which includes government backed mortgages and conventional loans. A government backed mortgage protects lenders against losses. These loans include an FHA or VA loan, which provides certain relief options following a natural disaster. A conventional (regular) loan may provide options, however these may differ based on the lender.
What type of assistance is available for government loans?
For government insured loans, lenders can evaluate your loan for mitigation assistance to help you keep your home. Also, lenders may execute a loan modification, temporarily suspend mortgage payments up to 6 months, waive late charges or other options to help the homeowner. Keep in mind, for conventional loans, you must reach out to the lender to see what relief may be available.
What steps should a homeowner take?
A homeowner should contact their lender immediately if they are unable to make the payments. Before signing any documents, get an understanding of the new terms of your payments. For instance, you should ask questions such as:
When will the amounts be due in full?
Will interest incur on the amounts suspended?
What are the new terms of the modification?
If homeowners are not satisfied with the options provided by the lender, they are encouraged to contact HUD’s National Servicing Center at 800. 569.4287. In addition, they can also contact FEMA for financial assistance.