Question 1: My house was damaged and I can’t live in it. Do I have to make my mortgage payments?

Yes. Most home loan documents require the homeowner to make mortgage payments even after a disaster – even if your house is destroyed and you cannot live in it. However, many lenders will allow you to delay mortgage payments for several months after a disaster (although interest may continue to accrue). Many lenders will make loan modifications to allow the missed payments to be added to the loan, thereby lengthening the term of the mortgage. You need to communicate with your lender and tell the lender about the disaster and your temporary inability to pay. The lenders will almost always work with you. If your mortgage is FmHA financed or FHA-insured and you begin to fall behind in your payments because of circumstances beyond your control, you have special rights.

Question 2: Do I have to pay my mortgage note while I am not living at the property?

Yes. It is not typical for a note secured by the borrower’s real estate to include any sort of forbearance provision that would be triggered by storm or flood-related damage or destruction of the property. However, you should communicate with your lender, and your lender may be willing to work with you.

Question 3: What should I do if I receive a notice that my lender is going to foreclose on my home for non-payment of the mortgage?

If you have received a written foreclosure notice as a result of a disaster-related financial hardship, you may be eligible for Federal Emergency Management Agency (FEMA) assistance to help you with your mortgage payments. You may file an application for FEMA benefits. See the FEMA section of this manual.
If your mortgage is FHA-insured or FmHA financed, you may be entitled to reduced or suspended payments. Your lender must notify you of this right and give you an opportunity to seek help before the lender begins foreclosure proceedings. However, you must meet the deadlines the lender will give you.
If you have income and you want to keep your house, you may be able to file a Chapter 13 bankruptcy. In this type of bankruptcy, the homeowner pays regular mortgage payments that accrue after the bankruptcy and all other living expenses. In addition, the homeowner pays an amount every month toward the mortgage installments that were delinquent prior to filing for bankruptcy. If you think you may want to file a Chapter 13 bankruptcy, you should consult an attorney.

Question 4: Can my mortgage holder foreclose on my home if I can’t make the payments?

Yes. The typical residential mortgage does not include forbearance due to storm or flood damage and allows the lender to foreclose following default. Please note that all foreclosures in Illinois are judicial; Illinois does not permit non- judicial foreclosures. A foreclosure in Illinois is governed by the Illinois Mortgage Foreclosure Law (“IMFL”), 735 ILCS 5/15-1101, et seq., and a full discussion of foreclosure is beyond the scope of this manual. Suffice it to say that a judicial foreclosure is a relatively long process and may be done only by order of court.

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