Mortgage forbearance proposed for NJ Ida survivors / NJ 94.5 / May 8, 2023
By Dino Flammia
Once he knew it’d be a while before he could return to his home that was devastated by the remnants of opens in a new windowHurricane Ida, Manville resident Eric Vaughn dipped into his savings to purchase an RV as a living space.
It’s been 20 months since the rainstorm hit, and he’s still living in that RV in the driveway with his two sons.
“I lost my whole life,” Vaughn said. “The mortgage company is looking to foreclose on my property.”
A month after moving into her Milford home, Leanna Jones was flooded by six feet of water from Ida. The single mother of two moved back in as soon as she could, even if that meant living without a fully functional kitchen or bathroom.
“It’s been a long road, it’s been a lot of trauma, my kids are still afraid every time it rains,” Jones said. “They don’t need the additional stress of me tanking my credit score because I’ve had to go into debt for this.”
Ida mortgage forbearance bill
According to New Jersey Organizing Project, a community organization that was created in the wake of Superstorm Sandy, there are thousands of Ida-impacted families that are still scrambling to get back home. And many could benefit from a proposed law that would award at least a year’s worth of mortgage forbearance to certain impacted homeowners.
opens in a new windowThat legislation was advanced unanimously on Monday by the Senate Community and Urban Affairs Committee. Under the bill, a survivor would have to submit a request to their mortgage servicer for the year-long forbearance. The homeowner could also request an extension of another six months.
The perk would be open to homeowners who were hit hard by Ida and can prove that they’re in bad shape financially.
“Despite federal aid, many homeowners impacted by Hurricane Ida remain financially burdened from the effects of the storm,” said Sen. Troy Singleton, D-Burlington, chair of the Senate panel. “This legislation would further assist these homeowners by providing them with mortgage relief and temporary foreclosure protections.”
Under the bill, a mortgage servicer would not be able to assess any penalties to homeowners who take the option, or relay any negative information to a debt collector of credit reporting agency.
If the bill were to become law, the forbearance would apply retroactively to any mortgage payments that were missed after Sept. 1, 2021.
opens in a new windowIda resulted in major disaster declarations for residents, businesses and local governments in a dozen New Jersey counties.
In testimony before the Senate panel on Monday, the New Jersey Bankers Association said it supports the legislative intent of the mortgage forbearance bill but does not agree with the language that would allow residents to extend their break beyond a year with no questions asked.
“We feel that there should be certain qualifiers and conditions in place before the automatic allowance of the 180 days,” said Brittany Wheeler, vice president and director of government affairs for New Jersey Bankers.
Wheeler added that there are concerns that local and community banks would be disproportionately impacted by the bill.
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