H.R.2928 - Mortgage Relief for Disaster Survivors Act (119th Congress)
Summary
H.R.2928, the Mortgage Relief for Disaster Survivors Act, aims to provide forbearance assistance to borrowers with federally backed mortgage loans whose properties are damaged or destroyed in a major disaster or emergency. The bill allows borrowers in declared disaster areas to request a forbearance of up to 180 days, with a possible extension of another 180 days, regardless of their delinquency status. During the forbearance period, no additional fees, penalties, or interest beyond the original mortgage terms would accrue.
Expected Effects
The bill's passage would provide immediate financial relief to homeowners affected by disasters, preventing potential foreclosures and stabilizing housing markets in affected areas. It would also shift the financial burden temporarily to mortgage servicers and potentially the federal government. This could lead to increased administrative costs for servicers and potential strain on federal resources.
Potential Benefits
- Provides immediate financial relief to homeowners in disaster areas.
- Prevents foreclosures and stabilizes housing markets during crises.
- Offers flexibility with the option to discontinue forbearance at any time.
- Ensures no additional fees or penalties accrue during the forbearance period.
- Applies to both single-family and multi-family homes with federally backed mortgages.
Most Benefited Areas:
Potential Disadvantages
- Could increase administrative costs for mortgage servicers.
- May strain federal resources if a large number of borrowers require forbearance.
- Potential for moral hazard if borrowers take advantage of the forbearance even without significant damage.
- The definition of 'verifiable damage or destruction' could be subject to interpretation and potential disputes.
- Delays in mortgage payments could impact the cash flow of mortgage-backed securities.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to provide relief to citizens affected by disasters. Congress has the power to regulate commerce and provide for the general welfare, which could be interpreted to include providing mortgage relief during times of crisis. The necessary and proper clause could also be invoked to justify the specific mechanisms of the bill, such as the forbearance requirements and definitions of covered loans.
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).