Our thoughts are with the communities who suffered damage due to Hurricane Laura. Below is some basic information for homeowners to assist with navigating insurance coverage, FEMA assistance, mortgage concerns and contractors in the wake of a disaster. We will be updating this guide as more specific information and resources become available. Please check back and call our office at (877) 445-2100 if you have any questions.
Filing an insurance claim after a major disaster can be a long and difficult process.
This guide provides some basic information about insurance that every homeowner should know before filing a claim.
1. Know What Kind Of Coverage You Have.
2. Know what is covered.
3. Know how much coverage you have.
5. Additional Living Expense/Loss of Use:
6. Personal Property:
7. Document your losses:
8. Claim Process:
9. Get repair quotes from reputable, licensed contractors.
10. Keep records.
11. Seek assistance.
The Federal Emergency Management Agency (FEMA) makes financial assistance available to residents of presidentially-declared disaster areas. This assistance can come in the form of temporary housing, grants for home repairs and to replace damaged personal property. Residents will be eligible for assistance to cover uninsured losses and if their home has been made unlivable as a result of storm damage. Residents of the disaster area should register for assistance by calling FEMA at 1-800-621-3362 (1-800-462-7585 for hearing impaired) or online at www.disasterassistance.gov. FEMA Individual Assistance is available for residents of the following parishes: Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis and Vernon parishes.
When registering, all applicants should have the following information available:
Assistance provided by FEMA for homeowners and renters can include grants for rent, temporary housing and home repairs to their primary residences, as well as other serious disaster-related needs, such as medical and dental expenses or funeral and burial costs.
Homeowners with mortgages on their homes should be aware of assistance that is available to them, and what the consequences are of accepting relief from their mortgage companies. In order to qualify for any mortgage relief, homeowners should immediately contact their mortgage company and ask for assistance due to this federally declared disaster. If you need further advice, you can also call the Louisiana Fair Housing Action Center at (877) 445-2100.
If you can’t pay your mortgage because of the disaster, your lender may be able to help you. If you are at risk of losing your home because of the disaster, your lender may stop or delay initiation of foreclosure for 90 days. Lenders may also waive late fees for borrowers who may become delinquent on their loans as a result of the disaster.
If you have a conventional mortgage, you are strongly encouraged to contact your lender for further information and to see if you are eligible for relief.
If you have an FHA-insured mortgage, contact your lender to let them know about your situation. Some of the actions that your lender may take are:
Are You Eligible for a Foreclosure Moratorium
You may be eligible for FHA Disaster Relief if you are one of the affected borrowers as described below. You must be in one of three basic groups in order to qualify for a moratorium on foreclosure:
Take Action to Qualify for Foreclosure Relief
A Foreclosure Moratorium applies only to borrowers who are delinquent on their FHA loan. FHA lenders should automatically stop all foreclosure actions against families with delinquent loans on homes within the boundaries of a Presidentially- declared disaster area.
It is very important that you notify your lender to be sure that they realize you are an affected borrower. Your lender may request supporting documentation and use it to determine if you meet the relief criteria. Once identified as an affected borrower, foreclosure action may be stopped for the duration of the moratorium period.
If your home was damaged in the disaster or you will not be able to make your monthly loan payment(s) because your finances were adversely affected, contact your lender immediately to request assistance.
Borrowers who were injured or whose income relied on individuals who were injured or died in the disaster will be asked for documentation such as medical records or death certificates, if available. Your lender will ask you for financial information to help evaluate what assistance can be provided to you to reinstate your loan.
If Your FHA Loan Was Current before the Disaster but Now You Can’t Make Your Next Month’s Payment
FHA’s Foreclosure Moratorium only applies to borrowers in default. If you are current, you should continue to make your mortgage payment whenever possible. If, however, you are unable to pay your loan as a result of the disaster, your lender may waive any late fees normally charged and let you know about other options. Also, if you foresee ongoing problems in making your mortgage payments resulting from changes in your financial status, you should contact your lender immediately.
If Your Lender is Unable to Assist You
If you are not satisfied after discussing possible relief actions with your lender, please call a HUD-approved counseling agency toll free at (800) 569-4287.
For conventional mortgages that are not backed by the FHA, mortgage companies will handle situations on a case-by-case basis. If you are unable to make mortgage payments, your lender may suspend payments for a specific period of time. This can be called a payment moratorium, a suspension of payments, or a temporary forbearance. After that time period is over you will have to make up the missed payments, either in a lump sum or through other repayment arrangements. If a mortgage company representative tells you they will add the payments on the back end of your mortgage or not to worry about making payments, DO NOT BELIEVE THEM.
If you are unable to make mortgage payments for an extended period of time, there are other repayment options. Make sure to get any agreements with your mortgage company in writing. Some of these include:
1. Repayment plan: You will make payments in addition to your regular monthly payment to catch up on any missed payments. How much your payment is depends on how much you can afford and how far you are behind. They may ask you to make up to 2 payments a month to catch up. Your mortgage company will likely offer this option first.
2. Loan Modification: Your missed payments will be added back into the loan balance, and the terms of your mortgage may be changed, including the interest rate and length of repayment. This is a long-term solution that will generally only be offered after you have returned to your house. You may qualify for a loan modification depending on your income and specific situation, but it is not guaranteed. You have to qualify for this assistance, by proving that you can afford the payments, and will have to provide proof of your income and expenses.
3. Partial Claim: Only for FHA, government-insured loans. A partial claim is a forgivable loan from the government agency that can cover from 4 to 12 months of missed payments. You can only qualify for 1 partial claim over the life of the loan. The loan has to be repaid when the house is sold or the loan is paid off.
Other Information to Know
Even if your house is severely damaged, and you can’t live in it, you still owe a debt to your mortgage company. Your mortgage is a contract on the land that your house is on, so even if the house is not there, you still owe that money.
If you can afford to make your mortgage payment, you should continue to do so. While mortgage companies are able to offer limited assistance, they are not generally sympathetic with homeowners in your situation. None of the above-mentioned repayment arrangements are guaranteed. They all depend on the homeowner’s ability to pay, and you must be able to qualify.
For assistance with any mortgage-related problems, contact a Housing Counseling Agency in your area. A list of HUD-approved counseling agencies can be found at www.hud.gov or by calling 1-800-569-4287.
Mortgage Companies and Insurance
When you receive an insurance claim for losses to your home, the check will be written out to you and your mortgage company. That is because your mortgage company also has an interest in the property. You will need to send the check to the mortgage company and they will deposit it into a restricted escrow account.
The money can only be used for 2 purposes:
1. Complete repairs: Your mortgage company will pay out the money to you or your contractor in installments as repairs are completed. You will need to provide the contractor’s estimates and receipts for the money to be paid out. Generally, the mortgage company will not pay out all of the money until repairs are 90% complete.
2. Pay off your mortgage: If the insurance claim is enough to pay off the mortgage, including any fees owed, the mortgage company can pay off the mortgage. If it is not, you can’t use the money to make regular payments. If you have a pre-payment penalty, ask your mortgage company to waive it. Clauses in certain mortgage contracts allow your lender to pay off your mortgage if your insurance claim is more than you owe on the house, even without your permission. Before sending a check to the mortgage company, make sure to find out if they will do this. If they pay off the mortgage, you will not have any money to fix the house.
Many contractors will try to take advantage of consumers after a disaster. Follow this advice to find a reputable contractor: