Mortgage Relief for Disaster Survivors Act
Mortgage Relief for Disaster Survivors Act would require lenders that hold or securitize Federally backed loans to offer a forbearance, on request, to borrowers whose homes are in a disaster area and have sustained damage or destruction. The forbearance would last 180 days, with the option to extend up to an additional 180 days. It applies regardless of the borrower’s current delinquency status, and borrowers can discontinue the forbearance at any time. During the forbearance, no new fees, penalties, or interest would accrue beyond what would have been charged if the borrower had made timely payments. The loan remains a “covered mortgage loan” (federal backing or GSE-backed) for single-family or multifamily properties (including 5+ units). The disaster area and period are defined by presidential disaster declarations under the Stafford Act. In short, the bill offers temporary payment relief to homeowners and certain multifamily borrowers affected by major disasters, while preserving the basic loan terms and preventing new charges during the relief period.
Key Points
- 1Forbearance eligibility and scope
- 2- Borrowers with a Federally backed mortgage loan (single-family) or Federally backed multifamily mortgage loan located in a disaster area may request forbearance during the covered period after damage or destruction from a major disaster or emergency.
- 3How to request forbearance
- 4- Borrowers must submit a written request to their loan servicer and provide documentation showing verifiable damage or destruction to the property.
- 5Forbearance terms
- 6- Once granted, forbearance lasts 180 days, with an option to extend for up to an additional 180 days. It is available regardless of whether the loan is delinquent.
- 7Costs during forbearance
- 8- During forbearance, no fees, penalties, or interest shall accrue beyond the amounts that would have accrued if the borrower had made timely payments under the loan terms.
- 9Definitions and scope
- 10- The act defines “covered mortgage loan,” “covered period,” “disaster,” “disaster area,” and differentiates between single-family Federally backed loans and Federally backed multifamily loans (5+ units), all backed by federal agencies or GSEs.