Mortgage Relief for Disaster Survivors Act
- Bill Number
- S. 2569
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Status
- Introduced
- Latest Action
- 2025-07-31: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2025-08-09T03:53:26Z
AI-Generated Summary
Mortgage Relief for Disaster Survivors Act (S. 2569)
Purpose
This bill aims to offer temporary relief from mortgage payments for borrowers affected by major disasters or emergencies. It ensures that individuals and families with federally backed mortgages in disaster-stricken areas can request a pause on payments without facing extra costs, helping them focus on recovery without the immediate threat of foreclosure.
Key Provisions
- Definitions:
- Covered mortgage loan: Includes federally backed loans for single-family homes (1-4 units) or multifamily properties (5+ units), such as those insured or guaranteed by federal agencies like the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or Department of Agriculture (USDA), or purchased by Fannie Mae or Freddie Mac.
- Covered period: Starts on the date a disaster is declared and ends when the declaration expires.
- Disaster: Covers presidentially declared major disasters or emergencies under the Stafford Act, as well as those declared by state governors or tribal leaders.
- Disaster area: Any location covered by the disaster declaration.
- Forbearance Requests:
- Borrowers with covered loans on properties in a disaster area can request forbearance (a temporary pause on payments) during the covered period, even if their loan is already delinquent (behind on payments).
- Requests can be made in writing, by phone, online, or other methods accepted by the loan servicer (the company handling payments), as long as the borrower confirms they are facing financial hardship due to the disaster.
- Granting and Managing Forbearance:
- Loan servicers must grant the forbearance quickly upon request, for up to 180 days.
- Borrowers can request one extension of up to another 180 days.
- Borrowers can end the forbearance early if they choose.
- During forbearance, no additional fees, penalties, or extra interest (beyond the normal scheduled amount) can be added to the loan.
- Effective Date:
- Applies to disasters declared on or after January 1, 2025.
Significant Changes to Existing Law
This bill introduces a mandatory right to forbearance for federally backed mortgages specifically tied to disaster declarations, which was not previously required in federal law for all such loans. While some existing programs (like those under the CARES Act for COVID-19) offered similar relief, this expands and standardizes it for future disasters, making it applicable to both single-family and multifamily properties without needing separate agency rules. It removes servicer discretion in granting relief and prohibits extra charges during the pause, strengthening borrower protections compared to prior voluntary guidelines.
Potential Impacts
- On Citizens: Provides financial breathing room for disaster survivors, reducing the risk of home loss during recovery. This could help lower stress and prevent broader economic fallout in affected communities by keeping housing stable.
- On Government Agencies: Federal entities like FHA, VA, USDA, Fannie Mae, and Freddie Mac will see increased administrative demands on loan servicers they oversee, potentially requiring guidance or monitoring to ensure compliance. No direct funding is allocated, so implementation relies on existing agency resources.
- On International Relations: No notable impacts, as the bill focuses on domestic housing and disaster relief.
Main Stakeholders Affected
- Borrowers: Homeowners and renters in multifamily properties with federally backed loans in disaster areas, particularly those facing income loss from events like hurricanes, floods, or wildfires.
- Loan Servicers: Private companies managing payments, who must process requests and grant forbearances without delay.
- Federal Agencies: FHA, VA, USDA, and government-sponsored enterprises (Fannie Mae and Freddie Mac), responsible for insuring, guaranteeing, or securitizing the loans.
- State and Tribal Governments: Governors and tribal leaders who declare disasters, triggering eligibility in their jurisdictions.
- Communities: Local economies in disaster areas, which may benefit from reduced foreclosures and faster recovery.
Notable Legal, Constitutional, or Political Implications
- Legal: Mandates private servicers to provide relief for federally backed loans, potentially leading to enforcement actions if not followed; it builds on the Stafford Act without altering its core disaster declaration process. Courts may see disputes over what qualifies as "financial hardship" or servicer delays.
- Constitutional: Aligns with Congress's authority over interstate commerce and housing finance, as it regulates federally involved lending without infringing on state powers over local disasters.
- Political: Enhances federal support for disaster resilience, appealing to housing advocates and disaster-prone regions; it could set a precedent for automatic relief in future crises, though critics might argue it increases risks for lenders without offsetting taxpayer protections.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Sen. Bennet, Michael F. [D-CO]
Recent Actions
- 2025-07-31: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-07-31: Introduced in Senate
Bill Versions
- Mortgage Relief for Disaster Survivors Act — issued 2025-07-31 — PDF (6 pages)