Natural disaster victims would get six months of mortgage relief under Senate bill

LOS Angeles – The survivors of natural disasters would be eligible for six months of mortgage aid under a bill presented Thursday by two senators whose states were ravaged by forest fires and floods.

The Mortgage Relief Act would apply to owners with federal government loans in disaster areas since January 1 without accumulating interests or penalties during the six -month period. Borrowers could request additional extensions of six months.

“Earlier this year, we watched the Los Angeles families have been devastated by forest fires, and to date, many owners still have trouble rebuilding from this disaster,” said senator Adam Schiff, D-Calif., Who co-sponsors the bill.

“As natural disasters become more frequent due to climate change, it is essential that we opened a path to stability for owners in times of crisis,” he added.

Certain parts of the former district of the Schiff Congress in southern California were devoured in January when Eaton fire torn Altadena, destroying nearly 6,000 houses and killing at least 19 people.

His co-partner is the senator Michael Bennet, D-Colo., Whose state was ravaged by the Marshall 2021 fire, which has damaged or destroyed some 1,200 houses in the county of Boulder.

“Coloradans know too well how difficult it is to pick up the parts and go forward after catastrophic forest fires,” said Bennet. “When the assembly of the financial and emotional costs of recovery weighs on families, they should be able to take the time to go up their lives and rebuild their houses.”

The members of the Chamber who represent Altadena, Pacific Palisades and Malibu in California presented a company bill this year which would provide 180 days of mortgage rescue without penalties or delay costs. The break would only apply to loans supported by the federal government.

Non -federal lenders are not required to offer payment reprehe to owners in disaster areas. But after the palisades and Eaton fires, more than 400 lenders agreed with a 90 -day break without reporting missed payments to credit agencies.

The survivor of Eaton Fire Freddy Sayegh said he had taken advantage of the program after heavy damage caused by smoke prevented her from returning to her home in Altadena. Since then, he has moved his family seven times and has hired thousands of dollars in unforeseen costs for food, clothes and other immediate needs.

Some costs were covered by insurance, but a large part of the money came out of his pocket while he awaits compensation.

He plunged into his savings when the 90 days were finished and paid for his delinquent mortgage in a lump sum, fearing that he incurred fees or forced to refinance.

“It has actually expressed a lot of pressure to find three months at a time,” he said. “There are a lot of people who are not three months old.”

In Texas, where the cataclysmic floods that started on July 2 caused around $ 240 million in damage, officials announced a 90 -day seizure moratorium which prohibits mortgage companies from launching or finishing seizures in the county of Kerr, the most harsh area struck by disaster.

According to the Deathgage Bankers Association, the delinquens almost doubled at the national level in March compared to the same era last year, up 21% compared to 12%.

In California, the delinquations linked to forest fires culminated in March at 4100 and fell to 2,240 in June, according to the data monitoring company ICE Mortgage Technology.

The trend follows a scheme observed after other natural disasters, in which delinquentes increase in the months following the disasters and gradually ended over the next 18 to 24 months, said Andy Walden, head of the mortgage and housing market studies at Intercontinental Exchange, the parent company of ICE mortgage technology.

“It takes time to many owners to unravel finances while dealing with emotional and logistical consequences to lose their homes,” he said. “Navigation on insurance complaints to work with FEMA, borrowers often need time to stabilize. The foreclosure moratories introduced after major disasters often give families the breathing room they need to recover. ”

The former resident of Altadena, Keni “Arts” Davis, looked at a mortgage at 10 years old when his house of almost four decades was destroyed. He has moved six times since then, finally landing near the neighborhood he loved so much.

A large part of his recovery journey included negotiations with his insurance company to reimburse his mortgage, rather than borrowing or looking for an extension.

“It could have mean a financial ruin,” he said.

He intends to rebuild himself by supporting money together by savings and microlaves that cost only $ 500. He said that the mortgage bills sound well on paper but that their timing leaves something to be desired.

“My grandmother would have said it was a day late and a short circuit,” he said. “We all depend on any help we can one day reach the next.”