A bipartisan group of United States senators wants federal housing agencies to extend a moratorium on foreclosures in Puerto Rico into 2019 after the devastation on the island and a big surge in mortgage delinquencies.
The four senators said in a letter on Friday that a longer moratorium was needed because large swaths of Puerto Rico remained without electricity in the aftermath of Hurricane Maria and because many residents were still trying repair the damage to their homes.
The senators noted that homeowners needed more time to “pick up the pieces of their lives” than was allotted under the current grace period, which expires in March. They want the moratorium extended until March 2019, along with a commitment that lenders will not seek to collect any mortgage payments in that period.
The four senators — Marco Rubio, a Florida Republican; Catherine Cortez Masto, a Nevada Democrat; Robert Menendez, a New Jersey Democrat; and Bill Nelson, a Florida Democrat — was sent to officials at the Department of Housing and Urban Development and the mortgage finance giants Fannie Mae and Freddie Mac. Officials with those agencies were not immediately available for comment.
About one-third of the island’s 425,000 homeowners are behind on their mortgage payments to banks and Wall Street firms that previously bought up distressed mortgages. And some 90,000 of those borrowers became delinquent as a consequence of Hurricane Maria, according to the data firm Black Knight.
One of the larger buyer of mortgages on the island over the last several years has been the Roosevelt Cayman Asset Company, an offshore investment vehicle in which an affiliate of TPG Capital, a large private equity firm, is an investor.
Other Wall Street firms that have acquired mortgages in Puerto Rico include big investment banks like Credit Suisse and Goldman Sachs and an affiliate of the Blackstone Group, a private equity firm.
In the letter, the senators also noted that additional relief from the threat of foreclosure was needed for residents of the United States Virgin Islands.