Home Business Local banks take lead on offering mortgage forbearances to Maui homeowners : Maui Now

Local banks take lead on offering mortgage forbearances to Maui homeowners : Maui Now

by Joshua Garcia

Three local banks in Maui, American Savings Bank, First Hawaiian Bank, and Central Pacific Bank, have pledged to provide mortgage forbearances to families impacted by the recent wildfires. This initiative is part of the Maui Response and Recovery Strategy implemented by Hawaiʻi Community Lending, a nonprofit community development financial institution based in Hawaiʻi.

A mortgage forbearance is a temporary pause on monthly payments that is typically offered to borrowers who have experienced a financial hardship. During the forbearance period, the accrued principal and interest are placed on the back end of the loan. This allows homeowners to temporarily reduce or suspend their monthly mortgage payments, providing them with financial relief during difficult times.

Hawaiʻi Community Lending reached out to 51 mortgage servicers both locally and nationwide, urging them to follow federal guidance and provide mortgage forbearances to Maui residents after President Biden declared a national disaster on August 10th. By taking the pledge, these servicers agree to offer 90-day mortgage forbearances to Maui homeowners, with the possibility of extending it up to 12 months based on individual homeowner needs.

The leadership shown by local banks American Savings Bank, First Hawaiian Bank, and Central Pacific Bank has also inspired national servicers, namely Servbank and Homestreet Bank, to follow suit and offer mortgage forbearances to impacted Maui families.

According to Jeff Gilbreath, the executive director of Hawaiʻi Community Lending, homeowners who enter a forbearance period will not be charged fees, penalties, or additional interest beyond what they would have incurred had they continued making their mortgage payments on time and in full. Homeowners also have the flexibility to shorten the forbearance period at any time and can request additional assistance beyond the initial forbearance.

The participating banks, along with other companies, are offering various forms of support to aid in the recovery efforts. For example, American Savings Bank is waiving all ATM fees in Maui and providing emergency personal lines of credit. First Hawaiian Bank is deferring loans and lines, providing relief with credit cards, and waiving ATM fees for individuals in Maui using their ATMs. Central Pacific Bank is deferring residential, consumer, and business loan and line payments, as well as reopening its Lahaina Branch to serve the financial needs of customers.

Maui homeowners who are unable to pay their mortgage due to the wildfires have several options available to them. They can contact their mortgage servicer directly to request a forbearance. The phone numbers for the participating banks, as well as Servbank and Homestreet Bank, are provided for homeowners to initiate the forbearance process. Additionally, homeowners can seek assistance from a HUD-certified housing counselor or download a form fillable letter from Hawaiʻi Community Lending’s website to formally request a mortgage forbearance.

With the support and leadership of local financial institutions, impacted Maui families can begin the long process of recovery and rebuilding after losing their homes in the wildfires. Hawaiʻi Community Lending’s website provides a comprehensive list of Maui Relief resources for those in need of additional support during these challenging times.

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