Victims of NJ Sandy Shouldn’t Have to Pay Federal Government Back: Lawmakers

The entire New Jersey House delegation signed a letter calling on the federal government to provide financial assistance to families and cities still recovering from the 2012 super storm, Sandy.

The letter, written by U.S. Representative Frank Pallone Jr., calls on House Appropriation Committee leaders to grant Housing and Urban Development Secretary Marcia Fudge the ability to waive collection of federal funds owed. by New Jersey homeowners who participated in Sandy’s rebuilding programs.

U.S. Representative Frank Pallone Jr. DN.J.  speaks Tuesday about the federal effort to deliver COVID-19 vaccines outside Asbury Park Community Health Center.

The Murphy administration announced a freeze on the clawback process, also known as “clawbacks,” in 2018, saying the State Department of Community Affairs would no longer attempt to claw back the refund of the grants. But while the frost was welcomed by Sandy’s victims, it also left them in limbo, does not know if they will be asked to repay part of the grants they have received.

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“Many families and municipalities affected by the storm are still struggling to rebuild themselves, an issue that has only been exacerbated by the unprecedented economic and public health crisis our country is currently facing,” wrote the representatives. “During this difficult period of economic uncertainty and record unemployment, federal agencies are unfairly demanding the repayment of tens of millions of dollars in loans and grants from Sandy.”

The letter also calls for the federal government to forgive the collection of community disaster loans given to municipalities to help recovery from the storm. Toms River, Little Egg Harbor and Berkeley are among the cities that have struggled to pay off disaster loans.

It is signed by Pallone and the American representatives. Andy Kim, Bonnie Watson Coleman, Bill Pascrell Jr., Albio Sires, Donald M. Payne Jr., Donald Norcross, Mikie Sherill, Tom Malinowski and Josh Gottheimer, all Democrats and U.S. Representatives. Christopher Smith and Jeff Van Drew, both Republicans.

It marks the last effort by New Jersey congressional officials to cancel disaster recoveries and loans.

Sandy’s advocacy groups, including the New Jersey Organizing Project, have lobbied for refunds to be canceled, saying the process was cumbersome, confusing and full of errors. Sandy’s advocates say that in many cases recovery occurs because the paperwork is missing or the forms weren’t filled out correctly.

Homeowners who participated in the largest reconstruction program in the state, the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program, as well as the Low Income Homeowners Initiative, the rebuilding homeowners with low to moderate income (LMI), have received recovery letters.

Because the programs were funded by federal block grants distributed by the Department of Housing and Urban Development, the RREM and LMI programs operate under the auspices of the Federal Stafford Act, which prevents homeowners from receiving more funds than necessary. to repair damaged houses.

The law also prohibits what is known as “duplication of benefits”, which means that other sources of assistance, including small business administration loans, insurance products and cash. intended for use in raising houses, are included in calculating the amount of money for a Sandy. the owner should receive to rebuild.

Joe Mangino is one of the hundreds of victims of Sandy who received a so-called "recovery" letter from the state, which claims he was overpaid thousands of dollars to rebuild his house.  In many cases, victims did not realize that there was a so-called "duplication of benefits" when they got both RREM grants and SBA loans.  Stafford Township, NJ Wednesday October 23, 2019

Even though repayments were frozen, they prevented RREM from shutting homeowners out of the program. This means that a deed restriction – or an agreement, in the parlance of the state – prevents the owner from selling the house, or even refinancing the mortgage, unless the clawback is paid off.

“When recovering Superstorm Sandy, we complied with everything that was required of us to receive funds to rebuild our house. Then we were blamed for errors in the paperwork that weren’t our fault and asked to return $ 7,000, ”said Chuck Griffin, a resident of Little Egg Harbor. “All I want is to end the storm. We should not be held responsible for the mistakes we did not make. “

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Jody Stewart, organizer of the New Jersey Organizing Project, commended Pallone’s office and the entire House delegation for supporting the reversal of clawbacks and community disaster loan repayments.

“We are grateful to senior congressman Pallone for taking on this task. We’ve been working with his office on this for the past few weeks, ”Stewart wrote in an email. “Sandy’s families hope this will bring us closer to the recovery and forgiveness of community disaster loans. In eight years and we continue to struggle, nine years will be simply inexceptible.

It is not known exactly how many homeowners have received recovery letters and are affected by the refund freeze. In “The Long Road Home,” a report released to mark Sandy’s fifth birthday by the New Jersey Resource Project, 20% of families surveyed in RREM and LMI programs said they were asked to repay money. ‘silver.

The average amount that families were asked to pay was around $ 30,000, and most said they could not afford to repay the funds. The report surveyed more than 500 families affected by Sandy.

Toms River Mayor Maurice B. “Mo” Hill Jr. said he would welcome the cancellation of payments on a $ 5 million disaster loan that the township has started to pay back. ‘last year.

Toms River has to budget $ 1.5 million each year to pay off the loan, which equates to a dime on the tax rate. Toms River lost $ 2.1 billion in ratables when Sandy struck – the most in the state – with nearly 10,000 homes damaged or destroyed.

“If we could get that $ 1.5 million back and not have to pay it every year, that would be a big help,” Hill said. “It would give us a tampon.”

Ventnor resident Fran Baronowitz received a recovery letter saying she owed more than $ 35,000, money she said she did not have.

“In August 2016, I received a letter demanding that I repay over $ 35,000 by August 2019. When I opened this letter, I was at a loss for words,” said Baronowitz. “How could that be? I followed the rules and was instructed to do so. Since then, I have received a notice every month. I have a fixed income, so I don’t have $ 35,000 to give back to the federal government. “

Jean Mikle has covered Toms River and several other towns in Ocean County, and has written on local government and politics on the Jersey Shore for almost 37 years. She is also passionate about the Shore’s rich music scene. Contact her: @jeanmikle, [email protected]


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