National Flood Insurance Program

The National Flood Insurance Program is managed by FEMA, though the insurance policies are sold by approved insurance companies. These include private-sector insurance companies that offer other types of insurance, such as homeowners, renters and automobile insurance.

If you need or want flood insurance, first check the FEMA website, www.floodsmart.gov, to make sure your community participates in the program. If so, you can ask your insurance company if it offers coverage. Information on FEMA and the NFIP is available throughout this section, but don’t forget to check out the additional information in the FEMA section earlier in this guide.

Alternative State Pools and Corporations

Many states have “last resort” insurance pools for residents who are unable to secure private-sector coverage. As many companies have discontinued or sharply reduced policy-writing, these last resort pools have become the only available source of insurance for many in areas vulnerable to hurricanes.

New Jersey: Check www.state.nj.us/dobi for information on the availability of alternative insurance pools.

New York: Check www.dfs.ny.gov for information on the availability of alternative insurance pools.

The Financial Community: Bridging the Gap Through Financial Tools and Products

Your next stop on the road to housing recovery may include contacting your mortgage lender. You may be behind on your housing payments, or need to obtain a loan to buy or repair a home. Even people who qualify for assistance or who had insurance coverage when the hurricane hit may still need a loan to cover the financial gaps between the amount of available funds and the costs to repair or rebuild.

In this section of the guide we’ll look at some of the mortgage programs that lenders, federal agencies, and individual states have put in place to help you face the financial challenges of housing recovery. We’ll review available resources for homeowners with existing mortgages, and we’ll outline both standard and special loan programs that can help you buy, repair or rebuild your home.

When you’re ready for more detailed information and assistance, be sure to make a pit stop and check out the additional resources that are provided at the end of this section.

“Help — I Can’t Pay My Mortgage!”

Disasters often force us to make extremely difficult choices. Whether you like it or not, in times of crisis you may have to choose between paying for the necessities of life and maintaining timely payments to those whom you owe money. These difficult decisions can drive you to fall behind on bills, mortgages, car and credit card payments, and other debts.

Some people are unable to pay their mortgages right after the disaster but can catch up within a few months as their lives gradually return to normal. Others have reserves or sources of cash that help them maintain their obligations for a few months until savings and other funds run out.

While many lenders are patient and understanding in the aftermath of disasters, most expect customers to re-establish timely payments or stick with payment plans within a reasonable amount of time.

Don’t Delay; Talk with Your Lender

It is important for you to work with your lender if you are behind on your mortgage — this can reduce the possibility of foreclosure and eviction. The unfortunate truth is that most borrowers either avoid contact with their lenders altogether or wait until it’s too late to save their homes.

Take measures to protect the equity in your home. Your equity is the value you have in your house, taking into consideration the value of the house minus any loans you have against it. Your home can help you build wealth, and it’s likely to gain in value over time. No matter what the circumstance, whether disaster or other life situations, it’s best to call your lender right away if you are having difficulty making your loan payments. Lenders have a number of ways they may be able to help. However, you need to talk to your lender early in the process, while there are still many options your lender can offer.

The financial community wants to support borrowers in the hurricane recovery process. When calling or talking with a mortgage lender, be sure to tell the customer service representative all of the details of your situation. If you need help, ask for it. If you are asked to do something, but are unable to do so, tell the customer service representative about your limitations. Mortgage lenders want to be helpful, but they need to know your circumstances in order to offer you the best options and help avoid foreclosure proceedings. The truth of the matter is that it costs a lot for everyone involved when a foreclosure occurs. Foreclosure is not a good solution for borrowers, communities, or mortgage lenders. In addition to speaking with your lender, you may also contact a housing or foreclosure prevention counselor for advice and guidance.

Work with Your Lender or Loan Servicer to Prevent Foreclosure

Remember, foreclosure is avoidable. The following options may be available, especially if you begin working with your lender early in the process of your financial difficulties:

Forbearance — You are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring your mortgage up-to-date.

Reinstatement — This is when you are behind in your payments, but you can promise a lump sum to bring your mortgage up-to-date by a specific date.

A repayment plan — If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past-due amount to each monthly payment until your account is current.

Modifying your mortgage — You and your lender can renegotiate your mortgage to extend the term (length) of your loan or take other steps to reduce your payments. One potential solution is to add the past due amount into your existing loan, and finance it over a long term.

Selling your home — If catching up on payments is not possible, the lender might agree to put foreclosure on hold to give you some time to try to sell your home.

Property give-back — The lender can allow you to give back your property — and then forgive the debt. While give-backs do hurt your credit rating, they don’t hurt as much as a foreclosure. The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens (mortgages or other debts) against the home.

HUD Foreclosure Prevention — Check It Out! There are a number of programs administered through the U.S. Treasury Department and HUD to assist homeowners who are at risk of foreclosure and otherwise struggling with their monthly mortgage payments. A summary of these various programs can be found on HUD’s website http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure. On this site, you can explore options such as loan modification and refinancing, find links to HUD foreclosure prevention counselors, and other useful information. Distressed homeowners are encouraged to contact their lenders and loan servicers directly to inquire about foreclosure prevention options that are available. If you are experiencing difficulty communicating with your mortgage lender or loan servicer about your need for mortgage relief, you can also find information about and links to organizations that can help contact lenders and servicers on your behalf at the webpage listed above. For FHA loans, HUD’s National Servicing Center (NSC) works with lenders to find ways to avoid foreclosure on borrowers’ mortgages. Information and frequently asked questions (FAQ’s) for both lenders and borrowers regarding FHA loan servicing and preventing foreclosure are available at www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm or by calling 877-622-8525. Search for HUD-approved foreclosure prevention counselors at www.hud.gov/offices/hsg/sfh/hcc/fc/.

HUD Relief for certain FHA, Fannie Mae and Freddie Mac, you may be eligible for a loan modification or forbearance. Also, for those homes located within the Federally Declared Disaster (FDD) zone, HUD has instituted a 90-day moratorium on foreclosures of Federal Housing Administration (FHA) insured mortgages.

Time to Rebuild or Repair — Where Can I Get a Loan?

Once you’ve settled your insurance claim, you’re ready to begin the process of repairing or rebuilding your home. Is your home completely destroyed or does your neighborhood still remain uninhabitable? If so, you may need a loan to cover the financial gaps — or you may be interested in buying or building in another area.

It is impossible to give a list of available loan products within the pages of this website. This section provides the name and a brief description of widely available national and state products that might make sense for disaster survivors. For ease in locating products that might best suit your needs, we’ve grouped them into four broad categories:

  • Low Down Payment Programs
  • Construction and Renovation Programs
  • Special Programs for Disaster Survivors
  • Consumer Loans for Disaster Survivors

We’ll briefly outline the features and benefits of standard and custom national products. In addition, New Jersey and New York are responding to Hurricane Sandy by adding special benefits for disaster survivors in their first-time homebuyer and affordable mortgage programs, so keep checking your local resources to see what might be available to you.

Low Down Payment Programs

Low down payment programs come with many options and features that make them even more attractive for borrowers with limited funds. Some of these loans will allow you to purchase a home with less than a $500 down payment or even no down payment at all!

A variety of low down payment conventional loan programs is available, and FHA has always been a good source for affordable loans. Some of these products even have special relaxed guidelines for targeted borrowers, such as police, fire, and hospital workers.

Alert: Loan Products You’ll definitely want to check out the Loan Product Matrix located at the back of this section to get a sense of the types of loan programs that may be available to you.

Alert: Brake Hard Here! If the lists of loan program features and descriptions contain terms that you don’t understand, don’t worry — help is available. You can contact a housing counselor or attend a homebuyer education workshop to learn about the mortgage terms. This will help you be in the “driver’s seat” when it comes to “walking the walk” and “talking the talk.” Access to a whole network of housing counselors is right at your fingertips — it’s located along Route 4 in the New Jersey and New York Resource Guides.

Alert: Don’t Forget to Tap into Your State Housing Finance Agency You should also check with your state Housing Finance Agency to see if local programs to help disaster survivors have been introduced. Locate your state’s housing finance agency at the National Council of State Housing Agencies (NCSHA) website, www.ncsha.org.

Fannie Mae’s My Community MortgageSM Product Suite The My Community Mortgages (MCM) help lenders serve America’s increasingly diverse population of low- and moderate-income borrowers. This menu of products is offered with several options and with flexible terms. A few of the key features of these products include: Minimum down payment of 0 to 3% , depending on the borrower and the number of units in the property. For a single unit property the minimum down payment is zero dollars from the borrower with a maximum 97% LTV, 3% can come from another acceptable source. For a 2-4 unit property the maximum LTV 95%, the borrower must contribute 3% the remaining 2% can come from another acceptable source. Financing up to 100% of the value of the property Flexibility related to credit history; nontraditional credit history accepted Special options for teachers, police officers, firefighters, and health-care workers Special options for the disabled

Freddie Mac Home PossibleSM Mortgage Product Suite

Freddie Mac’s Home PossibleSM Mortgage is designed for first-time homebuyers, and minority, new immigrant and low- to moderate-income borrowers. It provides you with a low down payment and flexible credit terms to make it easier for you to qualify. A few of the key features of these products include:

  • Minimum down payment of 5%
  • Available in fixed-rate and adjustable-rate mortgages
  • Flexibility related to credit history
  • Second mortgages allowed under certain circumstances.
  • Flexible income limits for underserved communities (hurricane-affected areas apply)
  • No cash reserves required
  • Homebuyer education is required (some exceptions apply)

HA 203(b) Mortgage Insurance Program

Section 203(b) is the centerpiece of FHA’s single-family mortgage insurance programs and is the most commonly used program. It is available in all areas of the country. It may be used to purchase or refinance a new or existing one- to four-family home in either urban or rural areas, including manufactured homes on permanent foundations.

FHA-insured mortgages offer many benefits and protections that only come with FHA:

  • Easier to qualify — Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.
  • Less-than-perfect credit — You don’t have to have a perfect credit score to get an FHA mortgage. In fact, if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA loan than a conventional loan.
  • Low down payment — FHA loans require a low down payment, and that money can come from a family member, employer or charitable organization as a gift. Other loan programs don’t allow this.
  • Costs less — FHA loans have competitive interest rates because the federal government insures the loans. Always compare an FHA loan with other loan types.
  • Helps you keep your home — Should you encounter hard times after buying your home, FHA has many options to help you keep your home and avoid foreclosure.

FHA does not provide direct financing, and it doesn’t set the interest rates on the mortgages it insures. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. In order to start the loan application process, please contact an FHA-approved lender.

Financial Resource Guide

 

National Resources

 State Resources

 Fannie Mae                   

3900 Wisconsin Avenue, NW

Washington, DC 20016

Telephone: 800-7FANNIE or 800-732-6643

Website: www.fanniemae.com

New Jersey

New Jersey New Jersey Housing and Mortgage Agency

637 South Clinton Avenue

Trenton, New Jersey 08611

Consumer Hotline: 800-NJ HOUSE (800-654-6873)

Website: www.njhousing.gov

Freddie Mac

Headquarters I (PHO I)

8200 Jones Branch Drive

McLean, VA 22102-3110

Telephone: 703-903-2000

Website: www.freddiemac.com

New Jersey Housing Resource Center

Telephone: 877-428-8844

Website: www.njhrc.gov

New York 

New York New York State Homes and Community Renewal (Albany)

Hampton Plaza

38-40 State Street

Albany, New York 12207

New York State Homes and Community Renewal (New York City)

25 Beaver Street New York, NY 10004

Toll-free: 866-ASK-DHCR (866-275-3427)

Website: www.nyshcr.org

HUD

U.S. Department of Housing and Urban Development

451 7th Street, SW Washington, DC 20410

Telephone: 202-708-1112 TTY: 202-708-1455

Website: www.hud.gov

 

Housing and Other Providers: Meeting the Rest of the Team

So far on the road to housing recovery you’ve learned about FEMA assistance, state and local assistance programs, and the insurance and financial industries. Now you’re ready to take the next leg of the journey. You may be planning to rent, to buy a property, or to repair or rebuild a house you already own. If that’s the case, this pit stop along Route 2 will provide a host of helpers that will make excellent travel companions along your road to housing recovery.

In the coming months, more resources will become available, and we will know better where rebuilding can take place and what you can do (or must do) to protect your home from future flooding. We’ll also know more about new opportunities to get assistance with disaster recovery.

In this section we introduce you to additional members of your “roadside assistance crew”— the websites, agencies and service providers who can help you. What they have to offer you today may be different from what they can offer you a week or a month from now. Check in with them regularly to see what’s new.

“I’m Ready To Go: Where Do I Start?” is for people who have decided on the course they want to take for their housing recovery and who are looking for help in navigating that course. This section describes the agencies and organizations and their role in helping you with your housing issues. Most of these relate to housing, but clearly Hurricane Sandy caused other problems as well. At the end we introduce you to the types of organizations that can help you connect to other needed resources.

Stop by the Resource Guide in Route 4

Don’t forget to explore the New Jersey and New York Resource Guides in Route 4. They will tell you how to contact the local agencies or organizations offering the assistance you need.

So many individual cities, towns and counties were affected by the storm that listing contact information for each would make this guide too long. Instead, we have chosen to list toll-free numbers, websites and other sources that can steer you to helpful information.

The road to housing recovery is not an easy one, but we hope this guide will help you plot the most direct route and avoid some hazards along the way. Good luck, and safe traveling!

Caution: Call Early for Help with Missed Mortgage Payments While housing counseling agencies can help you think about your options if you become delinquent on your house payment, the earlier you go to them the better. The longer you wait, the more options you give up. It is a little easier to develop a plan to pay back one or two missed payments. However, any missed payments over the course of a year add up to a lot of money and make it much harder to recover financially. Once your lender starts the foreclosure process, it is very difficult to stop it.

No matter where you live in the United States, you can call 888-995-HOPE, where trained counselors can help you work out delinquency and foreclosure issues.

Dealing with Property Title Issues

Whether you are rebuilding your hurricane-damaged home or buying a home, you must establish clear title to the property. In this section, we will discuss how you can get help in doing this from title companies and lawyers.

What Is a Title and Why Should I Care?

The term “title” refers to your interest in a piece of property, such as land. It can also refer to the document that establishes your ownership. As a property owner, you want to be sure that your title is “clear” — that is, no one else claims to be the owner instead of you. The way to establish clear title is to search back through deeds and other public records, often as far back as 60 years, to trace the chain of ownership and show that no one else lays claim to the land. A competing claim can threaten your ownership of the land altogether, or cost you thousands of dollars in legal fees to prove that it’s yours.

Caution: Disaster Aid Requires a Clear Title Many disaster recovery programs are only available to the person who has title to the property. That’s why this is such an important issue. If the recorded title holder to your home is no longer living, you must establish your own title. Don’t panic! There are ways to do this — see below.

If you live in a home that has been in your family for generations, somewhere along the way you may be missing information about who owned it and when. That makes the title “cloudy,” because then someone else can say the property is theirs. Some people who thought they owned their property have found that they will need legal help to establish clear title.

Most housing loans use the property as collateral because lenders need a way to get their money back if you stop making mortgage payments. That’s why lenders want you to have clear title before they give you a loan — they want to make sure that you really do own the property that you’re using to back up the loan.

Title Companies and Title Attorneys Can Help

Title insurance companies and title attorneys research public records and trace the line of succession (who owned the property and when). You pay a fee for the research and for resolving any problems that are found. If you have a mortgage on the property, the lender will require you to purchase an insurance policy that protects the lender against competing claims. You should also purchase an “owners policy” so that you are protected as well. You typically pay a separate fee for this “title insurance” as part of your monthly mortgage payment. If someone shows up later and claims ownership, the title insurance company will defend your claim, pay damages and cover your losses.

Most people use the title insurance company recommended to them by their lender or real-estate professional, but shopping around can save you hundreds of dollars.

Property Surveys Are Part of a Title Search

Lenders or title insurance companies often require a survey to mark the boundaries of the property. A survey is a drawing of the property that shows the boundaries of the property, and marks the location of the house and other structures on the property. You may be able to avoid the cost of a complete survey if you can find the person who last surveyed the property and request an update. Check with your lender or title insurance company to see if an updated survey is acceptable.

Legal Assistance

If you need legal assistance to establish clear title to your property and can’t afford a lawyer, there are a few different things to try.

Every state has legal aid offices that help people with low incomes deal with legal issues related to housing, wills, divorce and similar issues. Legal aid offices receive public funding, so their services are usually free. Because they serve all low-income people in their area, not just people who were victims of the disaster, legal aid offices are generally busy places, and it can take some time to get an appointment. Still, if you need a lawyer to do a title search, represent you in a legal matter, or to give you legal advice on your unique situation, the legal aid offices are one place to go.

Another way to get free or low-cost legal advice is through “pro bono” attorneys. These attorneys are in private practice but volunteer their time to give legal counsel to people who otherwise could not afford it. Depending on what you need, these lawyers could represent you in court, give you legal advice, or represent your legal interests in other ways.

To find a pro bono attorney or legal aid offices near you, turn to your state Resource Guide at Route 4 and look under the legal section.

Resources for Buying and Selling

I’m in the Market to Buy

If you’re buying a home, one way to find out about and visit a lot of properties is to work with a real estate professional. This service does not cost you anything; the seller pays the fee at the time the property is sold (the “closing”). Real estate agents and Realtors can be helpful in setting up times to look at properties, negotiating with the sellers over the price you are willing to offer, and getting the deal to closing.

Real estate professionals can also help you think through what sort of a house you’re looking for. Agents can show you properties in your price range and with the features you’re interested in. While real estate agents usually work for the seller, “buyer-brokers” represent the buyer’s interest in the deal. They also collect their fee at closing when the sale is complete.

Real estate professionals have something called the Multiple Listing Service (MLS), a computerized database of homes for sale. They can use this to search for the type of property you want in the town or neighborhood where you want to live. MLS listings are also available to the general public although real estate agents get access to more information. The listings have one or more pictures as well as basic information about the property: the number of bedrooms, how old it is, and the lot size. You can find vacant lots in the MLS as well, if you’re interested in building a new house.

Alert: Compare and Save on Title Insurance To save money on title insurance, compare rates among title insurance companies. Ask what services and limitations on coverage are provided under each policy so that you can decide whether higher-cost coverage may be better for your needs. However, in many states title insurance premium rates are established by the state and you may not be able to negotiate a lower rate. If you are buying a home which has changed hands within the last several years, ask your title company about a “reissue rate,” which is cheaper. If you are buying a newly constructed home, make certain your title insurance covers claims by contractors. These claims are known as “mechanics liens.”

While many people feel more secure working with a real estate agent, there are also a number of properties being sold by their owners. Look for guides to “for sale by owner” (or FSBO) properties in your area in supermarket foyers, Laundromats, or other high-traffic areas. You can also find listings on the Web. A quick Internet search brought up the following two FSBO services, but there are many others:

www.salebyownerrealty.com

www.forsalebyowner.com

As a buyer, looking at FSBO properties means that you will be negotiating directly with the seller of the property. This means that you will not have the benefit of a skilled professional looking out for you. If this concerns you, it makes sense to hire a lawyer to look over the contract.

What If I Want to Sell?

Real estate professionals can be very helpful if you’re planning to sell your property. To begin with, they can give you a sense of how much it is worth. This is not the same as a formal appraisal. This service provided by real estate agents is usually done for free, and is based on a rough search of comparable properties in the surrounding area.

If you are getting pressured to sell by a “predatory buyer,” who is offering you cash if you sell immediately at a low price, you might want to contact a local real estate firm and see if they can give you a better sense of the actual value of the property.

When you list your property with a real estate professional, you sign a contract with the agent for a period of time. This gives the agent the exclusive right to try to sell your property for you. If the property doesn’t sell, you can choose not to renew the listing agreement when the contract period ends. The real estate professional will advertise your property in the newspaper, in the Multiple Listing Service (an online database), and in other publications. The real estate professional is responsible for showing the property, getting the signed purchase and sale agreement, and helping to bring the deal to closing. The agent or Realtor can also give you helpful tips on what you can do to make your property easier to sell. You only pay if the property sells, and that fee is paid at closing (the settlement meeting where the property actually changes hands). The fee varies, but is usually from 5% to 7% of the sales price.

Choosing a Reputable Real Estate Agent

One good way to find a real estate professional is to look around an area where you’re interested in buying or selling and take note of the real estate signs you see. Who’s listing the most properties? Is the office local? Find out who other people in the neighborhood have used as an agent. Were they pleased with the service? Keep in mind that you don’t have to work with the first real estate agent you meet; you should shop around to find someone who understands your needs and is going to be easy to work with.

There are real estate associations in every state, and often local branches as well. The state Resource Guides at Route 4 have information on the associations in your state. You can search the associations’ websites for a licensed real estate professional in your area, and also find out what to do if you are not satisfied with your current real estate professional.

Some questions to ask a real estate professional are:

  • Can you show me your real estate license?
  • How long have you been in business?
  • What qualifications do you have to sell real estate?
  • Can I have a list of references to call?
  • Do you have a plan for marketing a property like mine?
  • How much of your business comes from referrals?
  • How do you track what’s happening with my listing (number of calls, number of showings, activity at open houses, and so on)?

Many people feel that using a licensed, qualified real estate agent is the best way to buy and sell real estate, especially if you do not have a lot of experience yourself. It is easy to be taken by real estate scams, and a good real estate agent will protect you from that.

You might want to work with a licensed Realtor®. While both real estate agents and Realtors® are licensed to sell real estate, a Realtor® is a member of the National Association of Realtors®. The main difference between a real estate agent and a Realtor® is that a Realtor® must subscribe to the Realtor® Code of Ethics and its underlying Standards of Practice. The standards are much more restrictive and confining than those governing agents who simply hold a real estate license.

Selecting a For Sale by Owner (FSBO) Service

If you feel sure that you can sell the property yourself, a For Sale by Owner service is likely to be available in your area. You pay a fee for this service, but it is less than what you would pay a real estate professional. The service will market your property in publications and on websites, and supply forms and documents, as well as some tips, on screening buyers and selling property. You may still want to get legal advice on the contracts and forms that you use for the sale.

Selling a house by yourself means that you have to show the unit, negotiate directly with the buyer on the purchase and sale agreement, and handle any other issues as they come up. If this concerns you, you can always hire a lawyer to look over the purchase and sale agreement or come with you to the closing.

The websites for two FSBO online services are listed below, but there are many others.

www.salebyownerrealty.com

www.forsalebyowner.com