The global pandemic of COVID-19 has turned the idea of normal on its head and put a lot of financial strain on countless people. Although jobs have become scarce, financial burdens haven’t lessened – including mortgages.
When you fail to meet your mortgage payments, you face the risk of foreclosure. So, what are your foreclosure defense options?
The good news is that a lawyer experienced in foreclosure can help guide you with your alternatives.
Financial Pressures Related To COVID-19
Within one month of America going on lockdown, an astounding 30 million Americans began seeking unemployment benefits, and the numbers show no sign of slowing down. This has put a huge strain on both the American economy, as well as financial pressure on many American households.
With more than 60% of American homeowners paying off a mortgage, this puts a lot of people in a vulnerable financial position, at the risk of foreclosure.
When it’s no longer possible to make payments, the bank may take possession of the property, leaving families without finances – and possibly without a home. Luckily, there are defense options to prevent this from happening.
Mortgage Relief Options
Different service providers are offering varied relief plans. The availability of these solutions will depend largely on your agreement with your Lender and whether or not you qualify.
The first of these relief options is a forbearance agreement. For those unfamiliar with this term, it essentially means to press pause on your mortgage payments or reduce the monthly payments owed.
This option doesn’t remove any debt, but simply alleviates the time pressure of repaying the funds. The money is still required to be paid in the future, and these repayments may follow different terms compared to the original agreement.
The CARES Act – U.S. Federal Response To COVID-19
When the Coronavirus started to seriously impact the economy, a new federal law was introduced to protect homeowners with their federally backed mortgages. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides two protective rules.
- From March 18, 2020, lenders and loan servicers are not allowed to foreclose for the 60 days that follow.
- Homeowners who are experiencing financial hardship have the right to request a forbearance for up to 180 days, and the right to request a further extension of another 180 days without any additional fees or penalties.
The CARES Act is a helpful tool for those with a federally backed mortgage, but various other providers are offering similar relief options. Contacting an experienced lawyer who is familiar with the legalities will help you better navigate these options.
Managing Your Mortgage Relief
The first question that you need to ask is for which relief option you qualify. This will depend on who services your mortgage, and whether or not it is federally backed.
For example, to qualify for the CARES Act, your mortgage must be federally owned or backed by one of the many federal agencies such as the U.S Department of Housing and Urban Development (HUD).
Once you know who to contact, then you’ll need to request forbearance or mortgage relief. This is done by contacting your service provider. Having the guidance of a lawyer will help you to make sure that you ask the right questions and follow the correct processes.
If you are approved for a foreclosure relief plan, then there are a few steps to take in order to make sure that you cover your bases;
- Get everything in writing, and keep track of these documents
- Read your monthly mortgage statements carefully
- Adjust any automated monthly mortgage payments
- Check-in on your credit statements for any errors
- Contact your service provider and resume your mortgage payments as soon your income is normalized
- Double-check your agreements with regards to property tax and insurance
Get Professional Help
It’s already been mentioned that an experienced lawyer can help make the process of avoiding foreclosure a lot easier. But it’s worth mentioning again. It’s not uncommon for scams to appear during a time when many people are financially desperate.
There are a few details to mark for attention in order to prevent getting caught in a scam;
- The request for a high up-front fee
- Non-guaranteed promises of a loan modification
- The request to sign over a property title or papers that you don’t understand
- Instructing you to make payment to someone other than your service provider
- Suggest that you stop making payments altogether
- Any other suspicious financial advice or requests
Don’t Suffer Unnecessarily
At the end of the day, we’re all in this struggle together. If you are one of the fortunate ones who are able to still pay your mortgage, we encourage you to continue to do so.
However, if your financial limitations prevent you from doing so, then get in contact with our expert lawyers to find out how we can help you assess your foreclosure defense options. Contact us at (954) 796 9600 to find out more.