NEW YORK (CBSNewYork) – There was good news Friday for some victims of Superstorm Sandy.
Shaun Donovan, the U.S. Secretary of Housing and Urban Development, said that families who are rebuilding and have Federal Housing Administration loans can put off making their mortgage payments for another 12 months.
“This isn’t just saving homeowners. This is going to save taxpayer dollars because a foreclosure is bad for all of us. Foreclosing on that home, losing money on that loan, when these are homeowners that have struggled to make their payments. We know that the vast majority of them are likely to succeed,” Donovan said.
Donovan also said they won’t get clobbered with a balloon payment.
“We’ve already met with the lenders. They’re excited about getting going on this,” Donovan said. “They’re ready to go and what they will do is evaluate those loans. They’ll just do the automatic calculation. They’ll be able to go to the homeowner and say ‘Guess what? We’re prepared to restructure your loan in this way. Your payment will either stay the same or go down. Sign here and were done.'”
As Donovan put it, “Homeowners need some breathing room.”