Foreclosure and Loan Modification Blog

Florida Attorney General Pam Bondi has announced that a settlement was reached with Nationstar Mortgage, doing business as Mr. Cooper, that “resolves allegations regarding Mr. Cooper’s servicing misconduct in the aftermath of Hurricane Irma.”

(If you're in foreclosure, or being threatened with foreclosure after a hurricane, contact our firm for a free Hurricane Hardship Review.)

Mr. Cooper's Misconduct

Mr. Cooper/Nationstar is a mortgage lender and servicer based in Texas which services mortgages nationwide. Their misconduct related to Hurricane Irma is similar to stories we've heard from homeowners with loans serviced by many servicers after the hurricane. It goes like this:

A mortgage servicer tells a homeowner that they can postpone 3-6 months of mortgage payments to recover from the financial impact of Hurricane Irma.

2017's Atlantic hurricane season was one of the strongest ever, with three Category 4 storms hitting the U.S. (Irma in Florida, Maria in Puerto Rico, and Harvey in Texas) causing billions of dollars in damage and thousands of deaths. Unfortunately, the 2018 Atlantic hurricane season, which runs from June through November, is expected to be above average in terms of number and intensity of storms.

As of this writing, two people have already died in flooding caused by tropical storm Alberto.

For 2018, forecasters are predicting 14-18 named storms, 7 hurricanes, and 3 hurricanes of category 3 or higher. So, it's a good idea to take all necessary precautions to protect you and your family's well-being and property from the effects of any storms that might come your way.

The National Hurricane Center says that there are two keys to weather safety:

1. Prepare for the risks.
   
2. Act on those preparations when alerted by emergency officials.
   

You can visit the National Hurricane Center's website to read all of their tips on safety during the hurricane season, but here are some of things to take into consideration as you prepare for potential storms.

If you accepted your mortgage lender's offer to suspend your house payments so you could get back on your feet after a hurricane, you may have found that their help actually put you at risk of foreclosure. Hurricane Irma, as well as Harvey and Maria, caused damage that led some homeowners to wind up in that situation.

Many homeowners accepted their lender's offer without knowing exactly what kind of help they were getting and what the consequences of that help would be. There are also cases of the bank saying one thing and doing another.

To have our law firm review your Hurricane Hardship [Request Your Review Here]

Let's take a look at two of the main ways mortgage payments can be suspended and repaid following a disaster:

Forbearance

A forbearance is when a lender temporarily suspends your payments so you can avoid falling behind on your loan for a period of time until your hardship is over. After it's over, all the missed payments typically have to be paid back in one lump sum.

It's great to have your bank's permission to not make some payments if you have an emergency and need to spend your money on other things. But, if your money is tight enough to need a forbearance, how are you going to afford to pay back 3, 6, or 12 missed payments in one fell swoop? That's why a forbearance is so dangerous. If you're at the end of your forbearance period and can't pay the money back and the bank won't give you a repayment plan, you could end up in foreclosure.

2017's hurricanes are long gone, but some homeowners affected by Irma, Harvey, and Maria are trying to avoid foreclosure after their bank-approved forbearance caused them to end up in foreclosure.

How could that be?

Hurricane Hardships

When hurricane Irma tore through Florida, it knocked out power and damaged property. A lot of people missed work and had to spend extra money on things like home repairs, replacement groceries, fuel for a generator, or a hotel. All the extra expenses made it hard or impossible to pay the mortgage.

Fortunately, many banks offered some assistance to homeowners going through a hurricane-related hardship. Unfortunately, after that temporary assistance ended, some homeowners are finding themselves worse off than before.

March 2018 Update: If your lender is calling you regarding delinquent payments after making you an offer of assistance, act immediately. We have been contacted by several homeowners who have received foreclosure notices after believing their lender or servicer had granted them relief.

Temporary mortgage assistance has been made available to homeowners in parts of the country that were declared disaster areas as a result of 2017's major hurricanes, including Hurricane Irma in Florida, Harvey in Texas, and Maria in Puerto Rico. That help is much needed for many people, but what happens when the relief ends?

After getting some kind of assistance, you and your mortgage could end up in better shape, but you could also find that your problems are worse. It all depends on your situation and what kind of assistance you get. So it's important to understand what you're getting into.

Let's take a look at some of the assistance available.

Hurricane Irma did more than $62 billion of damage in Florida and the Caribbean, making it the fourth-costliest hurricane on record. Homes and property were destroyed and damaged, 101 people died, and many endured serious hardships.

Survivors continue to clean up and try to return to their normal lives. Fortunately there is help available from the federal government, state government, and charities. Below are links and information on some of the help that's available.

FEMA, the Federal Emergency Management Agency, is involved in coordinating the response to Irma since a state of emergency was declared in Florida. You can go to FEMA.gov or Disasterassistance.gov for more information on a variety of programs to see if you are eligible for assistance and to apply. You can also call FEMA toll-free at 1-800-621-FEMA (1-800-621-3362).