US government freezes home foreclosures for victims of Sandy

The US government is also seeking hotels and motels to house tens of thousands of people

PUBLISHED : Wednesday, 07 November, 2012, 12:00am
UPDATED : Wednesday, 07 November, 2012, 4:10am

The US government said it had ordered the suspension of some housing foreclosures in areas hit by Hurricane Sandy and would help find hotels and motels to temporarily house some 34,000 people displaced by the storm.

"We don't want families to be victimised twice - once by the storm and once by a foreclosure," the Housing and Urban Development secretary, Shaun Donovan, said.

Donovan said he directed all Federal Housing Administration lenders to impose a moratorium on any foreclosures for 90 days in disaster-affected areas. The FHA backs about a third of all new mortgages in the United States.

Sandy slammed into the east coast on October 29, hitting New Jersey and New York especially hard as it killed more than 100 people. Thousands of homes were destroyed or damaged.

The Housing Department also said some 34,000 people displaced by Sandy in New York and New Jersey were eligible to receive short-term government-paid lodging such as hotels and motels.

With the weather getting colder, the US government is trying to get victims out of shelters and into hotels and motels while it searches for longer-term solutions, such as rental apartments.

The hotel and motel rooms will be paid for by the government under the Federal Emergency Management Agency (Fema) programme for temporarily sheltering people, called transitional shelter assistance.

The US government is also trying to rush rental assistance to Sandy victims who qualify, Donovan said. More than 32,000 applicants have been approved for quick rental assistance for a total so far of US$95 million (HK$762 million) in aid, he said.

New York Mayor Michael Bloomberg has said that an estimated 30,000 to 40,000 people in New York City alone were in need of shelter, including 20,000 in public housing.

Fema's website says disaster survivors may be eligible to stay in hotel or motel lodging "for a limited period of time" and have the cost of the room and taxes covered by Fema. Food and charges for telephones, room service and other amenities are not covered.

At the peak of the programme's use after Hurricane Katrina hit New Orleans in 2005, 85,000 households were in hotels in October, the Congressional Research Service said.

Hotels volunteer to participate in the programme and Fema has hired a contractor, Corporate Lodging Consultants, to help displaced people find the right hotel.

The government pays the same room rate to hotels that it pays for federal employees on business.

In New York City this could be quite pricey, at US$295 a night in hotels in the five boroughs of Manhattan, Brooklyn, the Bronx, Queens and Staten Island.