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Survivors Have Questions About Mortgage Pay Offs

Release date: 
June 24, 2011
Release Number: 

COLUMBIA, Mo. -- Many disaster survivors may be faced with questions about mortgage payoffs. Some applicants may receive insurance proceeds and their bank or mortgage holder may require the total mortgage be paid in full. This is known as a forced payoff, possibly leaving the applicant with an unmet need or unable to repair their home.

In the event of being forced to pay off a mortgage, the applicant may become eligible for FEMA home repair assistance. The applicant would need to submit a letter from either the lender or insurer advising that the payoff was required and not optional. FEMA would require the applicant to submit a copy of the insurance settlement.

A mortgage payoff is when the applicant chooses to pay their entire mortgage with insurance proceeds. Under this circumstance, the applicant will not be eligible for FEMA home repair/replacement assistance to avoid duplication of benefits.

The Small Business Administration (SBA) can refinance all or part of prior mortgages that are evidenced by a recorded lien, when the applicant (1) does not have credit available elsewhere, (2) has suffered substantial uncompensated disaster damage (forty percent or more of the value of the property), and (3) intends to repair the damage.

  • Homes -- Homeowners may be eligible for the refinancing of existing liens or mortgages on homes, in some cases up to the amount of the loan for real estate repair or replacement.
  • Businesses – Business owners may be eligible for the refinancing of existing mortgages or liens on real estate, machinery and equipment, in some cases up to the amount of the loan for the repair or replacement of real estate, machinery, and equipment.

The first step on the road to recovery is registering with the Federal Emergency Management Agency (FEMA). Registration may be completed online at, by Smartphone through, or by calling FEMA's toll-free registration line at 1-800-621-FEMA (3362). If you have a speech disability or hearing loss and use a TTY, call 1-800-462-7585 directly; if you use 711 or Video Relay Service (VRS), call 1-800-621-3362. Multi-language assistance is available. Telephone registration is available daily from 7 a.m. to 10 p.m., until further notice.

For more information, contact SBA's Disaster Assistance Customer Service Center by calling
1-800-659‑2955, emailing, or visiting SBA&'s Web site at Hearing impaired individuals may call 1-800-877‑8339. Applicants may also apply online using the Electronic Loan Application (ELA) via SBA's secure Web site at

FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

The U.S. Small Business Administration (SBA) is the federal government's primary source of money for the long-term rebuilding of disaster-damaged private property. SBA helps homeowners, renters, businesses of all sizes, and private non-profit organizations fund repairs or rebuilding efforts and cover the cost of replacing lost or disaster-damaged personal property. These disaster loans cover losses not fully compensated by insurance or other recoveries and do not duplicate benefits of other agencies or organizations.

Disaster recovery assistance is available without regard to race, color, ...

Last Updated: 
January 3, 2018 - 12:19