SCHUMER: HUD WILL WAIVE ‘DUPLICATION OF BENEFITS’ REVIEW FOR NEARLY ALL SUPERSTORM SANDY VICTIMS, ALLOWING THEM TO KEEP FLOOD INSURANCE SETTLEMENT FUNDS WITHOUT FEAR OF CLAW-BACK; AT LAST MINUTE, FEMA WILL ALSO EXTEND SANDY CLAIMS REVIEW PROCESS SO MORE HOMEOWNERS CAN APPLY

In July, Schumer Called on HUD Secretary Castro to Waive HUD Policy Requiring Every Settlement Negotiated by FEMA Be Scrutinized For ‘Duplication of Benefits’ For Sandy Victims;  Previous Burdensome & Bureaucratic Policy Endangered Homeowners’ Settlement Funds—The Majority Of Whom Received No More Than $20K & Are Still Spending Money To Rebuild

Decision Means HUD Will Waive Duplication Of Benefits For Anyone Who Received FEMA Payment Of $20K Or Less & Anyone Whose Duplication Is Less Than $20K —That’s 3 Out Of 4 Homeowners; Payouts Greater Than $20K Will Go Through Fair & Flexible Analysis & Duplication of Benefits Recoupment Could Be Waived In Many Of Those Cases, Too

U.S. Senator Charles E. Schumer announced today that, after his push, the U.S. Department of Housing and Urban Development (HUD) will waive its policy mandating a “duplication of benefits” assessment for Superstorm Sandy victims who receive $20,000 or less from FEMA. For the minority of cases that remain, HUD will look at each on a case-by-case basis and determine if there is a potential duplication of benefits, an assessment they promised Schumer would be done by the CDBG grantees with significant flexibility —and one that could still allow a complete waiver of the duplication of benefits analysis to occur if the duplication is determined to be $20,000 or less. Specifically, that equates to a waiver for nearly 75% of the cases, or 3 out of 4 homeowners, who were at risk of having these settlement funds clawed back under the current Duplication of Benefits policy. Under its current policy, HUD mandates that each and every recipient that receives National Flood Insurance Policy (NFIP) settlement funds from FEMA and also received Community Development Block Grants (CDBG) from NY Rising or Build it Back have their flood insurance settlement re-reviewed to identify any “duplication of benefits.” This assessment would be incredibly burdensome to homeowners who have waited years to receive the flood insurance protection they were entitled to, not to mention that the Duplication of Benefits assessment would likely cost more to conduct than the funds that would ultimately be recouped. Therefore, Schumer led the effort to have this policy waived for Sandy victims and was the first to formally call on HUD Secretary Castro to forego efforts to claw-back NFIP insurance money from Superstorm Sandy victims who have recently received additional flood insurance payouts.

Schumer has also called on the Federal Emergency Management Administration (FEMA) to extend the Sandy Claims Review Process that was set to stop accepting claims from homeowners on September 15, 2015. At the last minute, and after Schumer's urging, FEMA will now extend the Claims Review Process for an additional 30 days. This will allow hundreds of more homeowners who are eligible to have their claims reviewed sign up for the program without the fear that funds provided by FEMA will retroactively be clawed-back by New York Rising or Build It Back as a duplication of benefits. 

“The people this decision helps are the people who have scraped—and are still scraping—to get by and rebuild their homes, their lives. These are not the people the feds should be knocking on the door of to pay up. They did not profit from this disaster and many of them are still paying for home repairs and will be for a long, long time,” said Senator Schumer.  “HUD’s decision to waive the ‘duplication of benefits’ policy for so many Superstorm Sandy victims—and the promise that even more could be free of a claw-back—represents a sensible resolution, but more importantly, the right thing to do.

“Moreover, I am pleased to learn that given HUD’s determination today, FEMA will extend the claims review process by an additional 30 days. That process is working and putting hard-earned dollars back into the pockets of Sandy victims and that is why I fought so hard to see it put in place. An extension makes sense and will allow more homeowners who feel like they have been shortchanged to be made whole,” Schumer added.

According to federal court records and news reports, evidence supports allegations that private insurance companies unjustly and arbitrarily denied the flood insurance claims of thousands of homeowners affected by Superstorm Sandy, many based on suspect engineering reports. More than 1,000 property owners filed lawsuits in U.S. Eastern District of New York against insurers over flood insurance claims that were denied or underpaid in the wake of Superstorm Sandy. After Schumer’s push, FEMA agreed to reopen and review any flood insurance claim—of the approximately 144,000—filed by Superstorm Sandy victims, in addition to the thousands already in litigation.

Despite the long battle of fighting for these desperately needed funds, HUD’s initial policy required those homeowners who recently received additional flood insurance payments from FEMA to again have their settlement re-reviewed to determine if the funds were a “duplication of benefits” received from CDBG grants given years ago.

Earlier this year, Schumer publicly wrote to Secretary Castro and impressed upon him that in these unique circumstances NFIP settlement funds should not be sought to be clawed-back from homeowners under the “Duplication of Benefits” policy. Specifically, Schumer cited a federal statute that says, “The agency which provided the duplicative assistance shall collect such duplicative assistance from the recipient…when the head of such agency consider it to be in the best interest of the Federal Government.” Schumer explained that this statute gives HUD the authority to waive the mandate that NFIP settlement funds be recouped as a “duplication of benefits.” Schumer said that HUD should grant a waiver of this requirement in this situation because these homeowners have had to wait years for this funding due to fraudulent activity, in part by the Federal Government’s lack of oversight, and have to fight private insurance companies, leading to unnecessary aggravation - not to mention that initial payments to these homeowners likely failed to account for many of the additional losses that occurred as a result of the storm.

Similarly, in 2013, Schumer successfully pushed HUD to provide additional flexibility to Sandy victims who declined a government loan immediately after Superstorm Sandy. Initially, HUD’s “duplication of benefits” policy negatively impacted these victims by requiring that CDBG assistance be reduced by the amount of any approved SBA loan - whether the homeowner accepted the loan of not.

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