Compounding Crises: Foreclosure in Post-Maria Puerto Rico

Hurricane Maria made landfall in September 2017 when Puerto Rico was already in a foreclosure crisis. The Hurricane made it much worse.

In early 2016, the Obama administration reported over six percent of mortgages in foreclosure on the Island, almost triple the national average. At the time, twelve families were losing their homes each day, as the Island’s humanitarian crisis grew progressively more grim. By summer of 2016, NBC News reported, fourteen families were losing their home per day. A new federal administration brought different priorities. Private Equity and Puerto Rico, published by Hedgeclippers.org, reported that in the summer of 2017, eighteen families lost their homes to foreclosure every day, with mortgage servicers becoming increasingly aggressive. Then came Maria.

Now, in January 2018, reports show that approximately one-third of the island’s homeowners are behind on their mortgages. Many are awaiting insurance payments that they hope will repair storm-ravaged homes. Over 100,000 people have left Puerto Rico since Maria, further depressing the housing market. While HUD extended its moratorium on federally insured mortgage foreclosures until March 2018, there is no protection for conventional mortgages.

The devastation wreaked by Maria is now well known. Many communities are still without water and, after sunset, live in complete darkness, save starry skies. Banks have continued to execute foreclosure proceedings since Maria, with some mortgage services serving notice in newspapers rather than in person, increasing their chances of a default judgment. There are reports of unfair and illegal practices. Foreclosure notices are often in English, as are all federal court documents, in the majority Spanish-speaking commonwealth. Property owners are often intimidated by the banks and courts and don’t defend themselves or assert their rights.

Additional circumstances, like a failing job market, out-migration, and cultural characteristics, like shared family compounds, contribute to the confusion surrounding property rights in Puerto Rico. The local legislature has passed protections including mandatory mediation, but educating property owners of the process, requirements, and their rights under the law is fundamental to keeping those with shelter in shelter.

To this end, the University of Puerto Rico, the Inter-American University of Puerto Rico, and the Pontifica Catholic University of Puerto Rico’s respective law school clinical programs, along with other local partners, have created a foreclosure prevention program. Derecho a Tu Casa educates community members and offers pro bono foreclosure defense. La Mesa de Trabajo de Acceso a la Justicia is another pro bono legal services group on the island helping to protect homeowners from foreclosure. While the foreclosure crisis must be addressed at a policy level, Puerto Rican law schools, community groups, and the Puerto Rican Bar Association are leading the way in response to some of the compounding disasters.

These fantastic groups, as well as #UBLawResponds, rely on funding from generous private donors and concerned civic organizations. However, the Island’s sheltering needs currently outweigh the available resources. Others, including the federal and local governments must mobilize in the face of this crisis, because maintaining homeownership is an integral part of building Puerto Rico’s post-Maria future.