Mortgage Relief for Disaster Survivors Act
Summary
The "Mortgage Relief for Disaster Survivors Act" aims to provide forbearance assistance to borrowers with federally backed mortgage loans who are affected by major disasters or emergencies. It allows borrowers in disaster areas to request a forbearance on their mortgage payments for an initial period of 180 days, with a possible extension of another 180 days. The bill defines key terms such as "covered mortgage loan," "covered period," and "disaster area" to clarify its scope and application.
Expected Effects
This act would provide immediate financial relief to homeowners in disaster areas by allowing them to temporarily suspend mortgage payments without accruing additional fees or penalties. This could prevent foreclosures and help families stabilize their finances during difficult times. The Act applies to disasters declared on or after January 1, 2025.
Potential Benefits
- Provides immediate financial relief to homeowners affected by disasters.
- Prevents foreclosures and helps families stabilize their finances.
- Offers a forbearance period of up to 360 days (180 days + 180-day extension).
- Waives fees, penalties, and additional interest during the forbearance period.
- Applies to a broad range of federally backed mortgage loans.
Potential Disadvantages
- Could potentially strain the financial resources of mortgage servicers.
- May delay the recovery of the housing market in disaster areas.
- Potential for abuse if borrowers misrepresent their financial hardship.
- The long-term economic impact on the housing market is uncertain.
- Could increase the overall risk in the mortgage-backed securities market.
Constitutional Alignment
The bill appears to align with the "general Welfare" clause of the Constitution's preamble, as it aims to provide relief to citizens facing financial hardship due to disasters. Congress has the power to legislate in areas related to housing and economic stability, as implied by Article I, Section 8, which grants Congress the power to regulate commerce and provide for the general welfare. The Act does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).