Loss of home from
disasters, living in shelter or temporary housing is a devastating crisis
physically and emotionally.
A disaster can
leave an individual or family and on even a larger scale communities
homeless.
Homelessness is a serious issue globally in every major
city.
From shelter to
permanent housing must be a part of the planning and resiliency building
process not only from disasters, but as a major consideration to address
overall homelessness.
Can
disaster\emergency management principles be used to address social issues that
lead to major crisis of man-made disasters?
Yes. Something for communities to
consider.
BEMA International
|
How
HUD Could Help More Families Affected by Natural Disasters
By Alys Cohen – Government Executive
After
the winds die down and the flood waters recede, natural disaster survivors
begin the long process of putting the pieces of their lives back
together. But for low-income homeowners,
this period can exacerbate economic vulnerabilities, causing too many
survivors to lose their homes amidst the struggle to rebuild.
Earlier
this year, HUD developed a new “disaster standalone partial claim”
program to help homeowners who have mortgages insured by the Federal Housing
Administration avoid foreclosure.
However, unnecessary barriers to enrollment and the
limited scope of the program place this critical lifeline out of reach for
too many families struggling after recent storms and other disasters.
HUD
introduced its new program in response to the 2017 hurricanes and
wildfires to help borrowers impacted by natural disasters continue to
make their mortgage payments and stay in their homes. Through this program, disaster survivors
can access an interest-free second mortgage loan to cover up to one year of missed
mortgage payments.
Borrowers
generally repay the loan when they sell the home or refinance, and their
initial mortgage terms remain unchanged.
For those who can access it, the program can be a life-saver.
For the
partial claim option to work, mortgage servicers must be prepared to make
eligibility determinations for an unexpected surge of homeowners when a
disaster hits. But rather than
streamlining the process, HUD’s recently updated program retains unnecessary
roadblocks, potentially leaving many vulnerable homeowners out in the cold.
For
example, FHA homeowners with variable incomes, including small business
owners and hourly service workers, are likely to have trouble with a
requirement that their wages be equal to or greater than their wages prior to
the disaster.
Small
business owners often have to temporarily close their businesses during a
disaster and its aftermath.
Typically—and understandably—their income goes down
post-disaster. The same goes for their
employees and other retail and service workers who depend on a steady stream
of customers to make ends meet. Those
who have lost some of their wages as a result of a natural disaster, but who
are able to make mortgage payments again—the very people who most need
assistance keeping their homes—are unnecessarily blocked from the program’s
benefits.
HUD
should establish a reasonable threshold below 100 percent of previous income
to expand access to the program.
HUD’s
process is also duplicative.
Applicants must show they can afford their mortgage payments in
addition to showing that their current income meets the department’s
requirements. But if they were able to
make their mortgage payments before the disaster, and their current income
equals or exceeds their pre-disaster income, it should be obvious that they
can still afford to make their payments, and HUD should not require them to
prove that.
Even if
HUD were to adopt a threshold below 100 percent of pre-disaster income, it
should be based on data analysis demonstrating likely affordability. Moreover, HUD requires excessive
documentation of income and expenses for homeowners seeking hardship
assistance. Department officials
should act now to reduce this red tape, which can delay much-needed
assistance.
HUD
recently made improvements to the disaster standalone partial claim program,
(i.e. expanding the number of months
of back payments that can be covered by the program) but only for the
survivors of Hurricanes Irma and Maria in Puerto Rico and the U.S. Virgin Islands.
The
improvements should also apply to disasters in other states and
territories. Texans impacted by
Hurricane Harvey and Californians impacted by the wildfires, for example, are
unable to access this revised program to help deal with storm-related back
payments. Survivors of Florence in the
Carolinas and Hurricane Michael in Florida also are left out.
HUD’s
new partial claim program must be broadly available to survivors of natural
disasters who could use it to stabilize their mortgages in areas where the
recovery is slow. Until access to the
partial claim option is expanded and further streamlined, survivors who can
afford their current payments but need help catching up will be more likely
to lose their homes and face further devastation.
Alys Cohen is a staff attorney at the National Consumer
Law Center focusing on mortgage lending, foreclosure prevention, and
low-income homeownership. She also
directs the Center’s disaster response work.
|
Change without Sacrifice is an Illusion. Lisa Ellis
