Clawbacks, Cross-the-finish-line Fund, Foreclosure Forbearance, Oh my!

By Jody Stewart and Amanda Devecka-Rinear

Big thanks to the team of people who have been working hard on a full and fair Sandy recovery for all.  We’ve made some big moves, but we still have work ahead of us. Keep reading for an update on where we are now and where we are headed:

We fought for and won the Sandy Foreclosure Forbearance Bill extension (A5096/S3582). There were times when the pressure was on but we knew we could get it passed if we stuck together and worked hard. 

The foreclosure forbearance now goes until June 30th 2022 for those in the program. We should all give ourselves a pat on the back for that one.  As of now, it’s not clear that people who aren’t in the program now can get in, but that’s something we’d like to see.  We’ve reached out to the Governor’s office to see if there is some room in how the law is interpreted that would allow that to happen.  

In the meantime, if your bank is asking for evidence, you are welcome to send them this press release from the Governor’s office and here’s our original “explainer” about this law if you want a refresher on the details. And, remember that the DCA did provide a number for folks to call directly if your bank is giving you a hard time about this.  And as we know, some banks like to give folks a hard time about this.

As for the Supplemental Funding aka Cross the Finish Line Fund, it seems to be right on track per the timeline DCA has given us. Most baseline inspections have been completed. The applications are out and as we know more than 200 people have applied for the funding as of July 15th and the application process is open until August 25th. If everything stays on track, people should start seeing funding by the end of September. More people will have a chance to get home with this program who may not have had the opportunity before.  In case you have questions about how the program is working and how to apply, here’s our “explainer.” 

We know it hasn’t been simple, or easy, with the RREM program.  We want to make sure the Supplemental Fund helps as many people as possible.  Click here to take our online survey for folks to report how it’s going. We won the program together, and we’re going to make sure it works together.   

Last, but definitely not least, let’s talk Clawbacks.  This year two big things happened, and they’re connected.  First, New Jersey made the freeze on clawbacks official. Everyone should have received a letter saying that the amount owed remained (unless you’ve been working with RREM to submit receipts and have the amount owed lowered – which is a GOOD IDEA – read more here at the end of this article.) BUT THAT YOU ARE NOT REQUIRED TO MAKE A PAYMENT.  

And, that’s the thing, when we say “Everyone” we mean everyone.  So before Governor Murphy, there were folks that had gotten letters under Governor Christie saying they owed the state and had to pay in three years.  For some people, that three years started THIS Spring and Summer. Then there were people who maybe got a phone call and were told they should send in more receipts but never got a letter.  And then there were people who hadn’t ever heard a thing. Whelp, all those people got letters letting them know they had a clawback this year, and that the clawbacks were frozen. Good news -now you know and can join the fight.  Bad news -now you know and can join the fight.  

The freeze on repayment of the clawbacks that Governor Murphy put into effect last October 2018 are still in effect – and that’s better than being told you owe money back now, but not the same as not owing money back at all.  This is what the letter from DCA says “DCA does not currently require payment of the over-disbursed funds because of the freeze, but your obligations under your initial grant agreement remain in place.” 

The freeze means that for now you do not have to pay back your RREM clawback, but it does NOT mean it is forgiven. Although this is a temporary solution, it gives us time to fight for a better solution. Just because there is a freeze doesn’t mean you are not in jeopardy of receiving a clawback letter. The letters are still going out to new people. We are also seeing Clawbacks effect not only Pathway B people but people who were in Pathway C. Pathway C for those who don’t know, had the RREM program builders do their reconstruction. The residents of these homes had no control over funds and did not pay any money to their builders. The RREM program paid all their contractors. So how could they receive a Clawback?

So what do we do to address the Clawbacks? We want them to go away.  There are a number of “reasons” people end up with clawbacks, but for many people, it’s because the laws and rules are wrong.  That’s why we want to start by asking our Congressional representatives to change the rules so that ICC and SBA loans don’t count as a duplication of benefits anymore.  Just last year, the law was changed around SBA loans BUT! Only for disasters after 2016 – so – not us.  I mean, great for them, but if these laws don’t make sense and are getting overturned – lets do it for all of us.  

We have a delegation of representatives who are working on this at this time but we have to remind them how important it is for our recovery that this happens as swiftly as possible. They need to hear from us.  Send your clawback story to [email protected] with “Clawback Story” in the subject line. We will share these stories with our representatives to make sure they understand that this is a priority. People have suffered enough. Let us heal from Superstorm Sandy.

We will not forget what is important to all of us in our recovery and that is to make sure we all get home and can afford to stay home.