Homeowners who go through a natural disaster and then have difficulty making their mortgage payments are often entitled to one or more kinds of assistance, such as:
If you live in Hawaii and a volcano eruption has impacted your ability to make your home loan payments, keep reading to learn more about foreclosure relief and other forms of help that might be available for you.
Ordinarily, if you fail to make your mortgage payments, the bank may foreclose. In some cases, though, the government or the bank itself will impose a moratorium to prevent foreclosures from going forward after a natural disaster—at least temporarily.
For example, many banks, loan servicers, and investors (including Fannie Mae and Freddie Mac) stopped foreclosures temporarily after Hurricanes Harvey, Irma, Maria and after the wildfires in California in 2017. (To learn about different kinds of foreclosure relief for borrowers with Fannie Mae, Freddie Mac, VA, or FHA loans after a natural disaster, see Help for Homeowners Facing Foreclosure After a Natural Disaster.)
After Kilauea began erupting on May 3, 2018, several lenders, including Wells Fargo and Bank of Hawaii, announced mortgage relief for homeowners whose lives were impacted by the disaster.
Borrowers with Wells Fargo loans. Wells Fargo announced that it will allow borrowers to postpone making payments for 90 days and that it will suspend negative credit reporting, late fees, collection calls, foreclosure referrals (a foreclosure “referral” is when the servicer starts the foreclosure process by sending the case to an attorney or foreclosure trustee), and foreclosure sales. To get these protections and benefits, be sure to let the bank know about your situation. (To learn more about getting help if you have a Wells Fargo loan, check out the bank's Disaster Assistance and Property Damage Support website or call the bank.)
Borrowers with Bank of Hawaii loans. The Bank of Hawaii is suspending foreclosures and post-foreclosure evictions, generally for six months. Again, make sure the bank is aware of your situation. If your hardship lasts longer, the bank might offer you long-term relief, like a loan modification, which can permanently reduce your monthly mortgage payment. Let the bank know if you need long-term help. Also, the Bank of Hawaii is offering special low-interest loans to disaster victims—up to $25,000—so they can buy emergency supplies or living essentials, make home repairs, replace a vehicle, or cover working capital needs.
Help for borrowers with other lenders. Other mortgage lenders and servicers may also provide payment and foreclosure relief by offering various loss mitigation (foreclosure avoidance) options to borrowers. Possible relief alternatives include:
Call your loan servicer to find out about available options.
The Federal Emergency Management Agency (FEMA) provides financial assistance to federally-declared disaster areas, and the U.S. Small Business Administration (SBA) has special loan programs to help individuals and businesses after a natural disaster.
Help from FEMA. On May 11, 2018, President Trump approved a disaster declaration for the volcano-affected area and made federal disaster assistance available to the state of Hawaii to supplement state and local recovery efforts in the areas affected by the Kilauea eruption and earthquakes. (For information about available aid, including individual assistance if and when it becomes available, see FEMA’s Hawaii Kilauea Volcanic Eruption And Earthquakes. Also, review FEMA’s Federal Aid Programs for the State of Hawaii.)
SBA disaster loans. Even if you don’t have a small business, disaster victims who have experienced damage to their home or personal property and who are in a declared disaster area may qualify for a low-interest disaster loan from the SBA. As of May 17, 2018, Hawaii’s volcano-affected areas aren’t on the list of eligible areas, but this is likely to change. Keep an eye on the list if you're interested in applying for this kind of loan. (To learn more, read Getting a SBA Home or Personal Property Loan After a Natural Disaster.)
Be wary of calls from anyone who offers you mortgage relief on behalf of a government agency, or offers you a loan or other foreclosure relief services, especially if they ask for an upfront fee. The government won’t ever charge you to get a benefit or service, and won’t ask for your financial information.