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Post Series: Hurricane Resources
Man fixing the roof of his home

When a natural disaster strikes, it has the tendency to temporarily turn our world upside down. It puts stress on us physically, mentally and emotionally. It also throws pocketbooks way out of whack and can put a serious strain on finances.

If you’re overwhelmed at the prospect of rebuilding, you may be thinking you need to walk away from your home and let it go into foreclosure. There are a variety of reasons why that’s not ideal. At the same time, your mortgage lender should have the resources to be able to help you during this time. We’ll go over some options that may be available to assist clients affected by natural disasters.

If you’re considering a foreclosure, you should know the ramifications. It also helps to know the resources that are available to help keep you in your home. Let’s go over those.

Impact of Foreclosure

A foreclosure is a big step to take in terms of both your life and your financial profile. For starters, you’re turning over your home to your lender. You have to find another place to live at least on a temporary basis.

The biggest thing to be aware of in terms of finances with foreclosure is the impact it has on your credit. For starters, your credit score is going to take a big hit. The foreclosure also remains on your credit report for seven years. The actual impact on your FICO score does lessen over time.

The other important thing to know is that you may have a hard time getting a mortgage for a while. Mortgage investors like Fannie Mae, Freddie Mac, FHA and VA want to feel confident in your ability to pay off the home note. When you have a foreclosure on your record, there’s a little hesitance there.

Different lenders may have different policies surrounding this and there are also individual policies that mortgage investors have. The following timelines apply here at Quicken Loans. Other lenders may or may not have different policies.

The soonest we can help you with any kind of loan option is one year after the foreclosure. If you want an FHA, VA or USDA loan, the waiting period is three years. Finally, if you’re working on getting a conventional loan through Fannie Mae or Freddie Mac, you need to wait at least seven years from the time the foreclosure shows up on your credit.

A foreclosure may not only affect your ability to get a loan, but it may also impact the terms and the type of rate you can get. It can hinder your chances of getting a home in the near future.

Options to Avoid Foreclosure

The effects of foreclosure can be drastic, but the reason you’re considering it may be that you don’t know how you’re going to be able to get your financial situation in order and find a way to get back on your feet. No one has an easy time when trying to recover from a tornado, hurricane, earthquake or other catastrophe. That said, there are definitely options available to help you.

Mortgage Payment Assistance

Natural disasters temporarily take away a lot of our income in terms of preparing and getting supplies. The effects can last much longer if your workplace is closed for repairs for any length of time following the disaster.

You don’t want to fall behind on your mortgage payment without contacting your lender. Every disaster is different, but if you typically reside in a declared disaster area, your lender has options to help you. FHA, VA, Freddie Mac and Fannie Mae have all come up with plans to help people affected by these disasters. The response from the major mortgage investors is different for every situation. With that said, let’s list past options to see what might be available to you.

Investors can give lenders the option to do something with their mortgage payments called a forbearance. A forbearance is a period in which your payments are paused. Lenders sometimes have latitude on how long the forbearance should be in order to give you time to work on necessary repairs, and get back to work and start getting things back in order.

When a forbearance is finished, you have the option of making payments in one lump sum. However, you don’t necessarily have to do it this way. Lenders may have the option of doing a noncredit-impacting loan modification and work with you to extend the term of the loan to fund the number of payments you missed.

This is just one potential solution among others, but you won’t know until you contact your lender. Don’t hesitate to reach out if you think you’re going to have trouble.

If you’re a Quicken Loans client in an area impacted by a natural disaster, you can get in touch with our Servicing team at any time by calling (800) 508-0944, option 7. From there, someone will be happy to look into your situation and see how we can assist.

Rebuilding Assistance

Cost and time involved in rebuilding are factors that lead homeowners to consider foreclosure. There’s no doubt that it’s a considerable expense. With that said, there are definitely resources available to help.

One of the first places to look is at your homeowners insurance policy. It’s designed to cover you in the event of house damage. Get a copy of your policy and know in advance what it covers. These policies typically don’t cover flood damage without additional flood insurance. Unless you live in an area that frequently floods, your lender may not have required you to carry the additional coverage.

If you’re getting ready to file a claim, be sure to document the extent of the damage for the insurance company by taking pictures. You also have a responsibility to make any temporary repairs necessary to mitigate against further damage. You can do this by making temporary repairs like putting up tarps and boarding-up exposed areas.

Keep all receipts because your insurer may be able to reimburse you for out-of-pocket expenses for temporary living arrangements as well as temporary repair.

If you feel it’s necessary to move permanently, you can take a look at settling with your insurance company and buying a new house instead of repairing the old one. It’s still important to estimate how much it would cost to repair because that’s your basis for beginning replacement negotiation and how much you can get. If you choose to go this route, you just need to make sure you’re going to get enough to pay off your current mortgage.

Other Available Resources

If you can’t make an insurance claim or your deductible is too high for it to make sense, there are other resources out there.

The Federal Emergency Management Agency (FEMA) provides all sorts of disaster relief resources in federally declared disaster zones. One type of this assistance is a grant to help with the rebuilding process. If you receive a grant, you don’t have to pay it back.

The Small Business Administration also provides low-interest disaster loans to businesses of all sizes, nonprofit organizations, homeowners and renters. With these loans, you can replace damaged or destroyed real estate, personal property, machinery and equipment, as well as inventory and business assets.

Finally, the American Red Cross offers temporary assistance with food, shelter and medical care in the wake of disasters. They’re also able to help with recovery plans to help you on your path to recovery.

It’s not going to be an easy process, but there are ways to recover from this and make sure you stay in your home. If you need assistance with your mortgage payment, feel free to give us a call at (800) 508-0944, option 7. If you need help with your insurance claim, our Insurance Loss team will be happy to guide you if you give us a call at (866) 947-8425.

If you have any questions, you can feel free to reach out to us in the comments. We’ll be happy to direct you to the right place.

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This Post Has 4 Comments

  1. I am dealing with a predator lender.
    September 1, 2017 Champion Mortgage aka Nationstar aka Mr. Cooper took over the servicing of my Wells Fargo
    Reverse Mortgage with a repayment plan in effect since March , 2016 where I was paying $400 a month and got the balance down to $14,300 and was current on that repayment plan when CM took it over. WF stated CM would honor all existing RPP Repayment Plans.
    October 2017 called C M to ask why RPP amount not taken. After a great run around CM had me fill out a RPP plan and I submitted void chek for it to be automatically withdrawn. New plan would be around $229.. Nothing happened, called several times
    May 2018 get notice of default notification. told…….we were going to honor your RPP but you are in default for not having insurance. we spent $1700 forced insurance.
    Write back ….. have insurance, and Irma disaster claims in your Loss Draft Dept, show me the declaration page for the $1700 spent.
    Some one else responds and says, OH, Mr. Ben Allen made a mistake but we can not honor your plan because you never provided a “void check”. This 9 months after I had filed. Called with a HUD representative on the line. spoke to a Mr. Alexander. who states, you may not owe any money because it appears WF has charged you on insurance which created the RPP to begin with back in 2008. Can you provide Declaration Pages from 2008 onward. I spend 120 hours gathering data. emailed Mr. Alexander and tried to call to no aail
    wrote them back, someone else responded with a Foreclosure Notice filed in Charleston SC
    I called them and asked for a Reinstatement. I called CM and asked for a RPP, I am told, you can not get an RPP because you are in foreclosure.

    Chaotic, confusion, disorder communication by CM design. Their intent has always been to put me in foreclosure. Now I am there.
    No one wants to give their name, supervisors are not available, no one wants to give their personal return phone number, no one wants to provide an ID or a last name. Once in a while you get someone to give their ID. NO TRANSPARENCY NOR ACCOUNTABILITY.

    Have $50,000 from insurance checks on hold because I have been busy trying to safe the house. CM lost these checks once already because they refuse to send “certified mail” unless its a foreclosure. Checks are in CM and my name.

    Can not find a General Contractor that CM requires. Been hectic, stressful, blood pressure is up and I almost faint…. heart beat at 118 a minte when it should be between 60- to 100 .

    Predator Lender. My first response is ” You must provide your full name, your email, you department and title, and phone number because I require Transparency ad Accountability.” If you can not do this, you are not the person I need to speak with. Give me your number and I will call you back to continue this conversation.”

    I got a Celina Shepherd and sent her the data on the $10,000 PLUS I have been overcharged by Wells Fargo. Also I have paid into the RPP around $6,000…….However, for more tha 10 days after 3 phone messages and an email of the Declaration pages, Ms. Shepherd has not responded. We are allegedly suppose to have a RPP with $8,200 cash and $126 monthly payment for remaining $5,000 RPP balance. Papers are suppose to arrive, but postman has not picked up my signed receipt.

    I have a multi unit with areas I can rent out. I have rented one out at $1600 which now provides more income so the RPP could go back to $400 a month and not give up my Cushion Cash.

    However, not response from a predator lender whose employees tell me “I am not allowed to read the file” I will email a supervisor or we do not have a supervisor available, and the same person passes the buck on your correspondence reply and you do not get
    serviced properly. So far the agencies I have contacted have a Big mouth and NO TEETH. “oh, we just monitor.” or they BOTCH things very badly such as the “wet behind the ears” man from Greenpath.

    I would like to have my Reverse Mortgage serviced by another entity. NOT a “predator lender.” Can you help
    Dina del Rio Time is running out and my FICO score IS AT 675 – 700 NOW.

    1. Hi Dina:

      I’m honestly not sure what’s going on here. Typically, with a reverse mortgage, you wouldn’t have a required monthly payment at all. Your responsibility is to take care of maintenance, taxes and insurance. Your situation sounds complicated. You can try talking to one of our reverse mortgage specialists at One Reverse Mortgage through (888) 980-1543. However, my suspicion is you’ll have to speak with an attorney about all this to really get it sorted out. I’m sorry. That’s all I can tell you.

      I’ve also removed your contact information because this is a public forum. Good luck!

    1. Hi Daniel:

      I’m going to have someone reach out to you about a possible forbearance, or payment pause, to help you out during this difficult time. Thanks!

      Kevin Graham

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