Published: September 2018

Advocates warn that HUD’s disaster relief program is too limited in scope

In an official letter to the U.S. Department of Housing and Urban Development (HUD), advocates urge HUD to improve its efforts to expedite the process for borrowers in disaster areas to access loss mitigation. While a good start, The Disaster Standalone Partial Claim program does not do enough for borrowers in disaster areas that have not yet fully recovered, and the program includes vague and unnecessary eligibility requirements that will impose unnecessary barriers to mortgage relief.

The Department of Housing and Urban Development (HUD) seeks to create an expedited process for borrowers to access loss mitigation through the Disaster Standalone Partial Claim, which provides a partial claim to address past due payments without changing the loan's term or interest rate. While a good start, the Disaster Standalone Partial Claim is unnecessarily limited in its scope. For example, by only focusing on homeowners who have maintained or increased income, HUD ignores the reality that full recovery from a disaster is a long process. As a result, the Disaster Standalone Partial Claim will not provide relief for the many people still struggling in disaster areas that have not fully recovered.

The program is also unnecessarily limited to Puerto Rico and the U.S. Virgin Islands despite the fact that many other areas of the country still face the aftermath of recent disasters.

Lastly, HUD must recognize and take steps to address the broader foreclosure crisis in Puerto Rico. Hurricane Maria exacerbated an already severe housing crisis. Without taking targeted steps, Puerto Rico’s housing market is in danger.

 

 

Lead Organization

National Consumer Law Center (NCLC)

Other Organizations

Americans for Financial Reform | Consumer Action | National Consumer Law Center (on behalf of its low-income clients) | National Fair Housing Alliance | National Housing Law Project | UnidosUS | Foreclosure Prevention and Consumer Rights Legal Aid Clinic, University of Puerto | Rico School of Law | North Carolina Justice Center | One Stop Career Center of PR, Inc. | Pontifical Catholic University of Puerto Rico

More Information

For more information, please visit NCLC.

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Advocates warn that HUD’s disaster relief program is too limited in scope   (CommentsHUD.pdf)