Floyd Brings Out Mortgage Relief

Peter G. Miller
OurBroker®

First hurricane Dennis, and now hurricane Floyd, have battered the East Coast this year while in the West fires have consumed hundreds of thousands of acres. There is little to make such events welcome, but at least most mortgage lenders are willing to help victims when Mother Nature runs amok.

Natural disasters strike with terrible regularity, and the damage can be overwhelming. I know, because ten years ago what had been a family beach house was decimated by hurricane Hugo.

Once a rustic structure on six private miles of Carolina beach, the home had five bedrooms, five baths, two kitchens, two living rooms, and a library until it was effectively dismantled when hit by 26-foot waves.

Hurricanes are known for high winds and massive amounts of rain. But the greatest danger is the "storm surge," an astonishing wall of ocean water generated by a hurricane's wind and pressure. Moving at great speed and weighing billions of tons, such waves can quickly reshape coastal areas by creating new channels, eroding beaches, and destroying man-made structures.

While the beach house had been sold six months earlier and a replacement property built a mile inland, even the inland home felt Hugo's impact.

Sea water nearly a foot deep actually went under the inland house, not a structural problem because the home was built on deep pilings. However, the sea water soaked the ground with salt. In the end what was green turned brown across thousands of once-forested acres, while all around trees were blown over or actually sheared off by the storm's powerful winds.

In such disasters you always find heroic people -- the ambulance drivers, National Guard personal, the police officers, power company workers, and fire fighters, and others. And you always find a willingness to re-build, knowing that in time and with certainty nature will eventually return to uproot all which has been placed in her way.

Over the years -- and through innumerable disasters -- lenders have a evolved a series of protocols to help borrowers when such emergencies arise.. In general terms, homeowners are likely to find that most lenders (but not all) are willing to make one or more accommodations when disaster strikes.

The catch is that lender leniency is not automatic and should never be assumed. Some lenders allow no relief, but more commonly lenders offer forbearance on a case-by-case basis, which means it's the owner's job to contact the lender, explain what happened, and show actual damages. Photos, insurance claims, police reports, news clips, and other documents can all help.

What will a lender do for you when disaster strikes? Several options may be plausible.

• Not report late payments to credit bureaus.
• Forgive late fees.
• Allow payment extensions.
• Allow a missed payment -- by adding a payment to the end of the loan.
• Delay foreclosure actions.

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Published: September 21, 1999

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Editor's Note: This article reflects the opinions of Peter G. Miller only and not necessarily the views of this or any other publication, organization or Website owner.

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .