What Will Happen to Your Mortgage Once COVID-19 Relief Ends?

The CARES Act Foreclosure Moratorium expires Aug. 31, but there are still options to protect your home.  Don’t delay and risk losing your home to foreclosure!

What is the CARES Act?

As the Coronavirus surged across the country causing temporary business closings and unemployment, millions of homeowners struggled to keep current on their mortgages. In order to give temporary protection from foreclosure, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) on March 27, 2020. 

The CARES Act covers first and second federally and GSE-backed mortgages including:

• Fannie Mae or Freddie Mac
• U.S. Department of Veterans Affairs (VA)
• Federal Housing Administration (FHA)
• United States Department of Agriculture (USDA)

About one-third of all mortgages are not covered by the CARES Act.

Homeowners that have one of the above qualified mortgages are provided two options for temporary mortgage relief:

1. A lender may not foreclose on you until August 31, 2020.  The CARES Act prohibits any lender from starting a judicial or non-judicial foreclosure against you up until August 31, 2020. It also protects you from finalizing a foreclosure judgement or sale during this time period. Once this protection expires, mortgage lenders will be able to start foreclosure proceedings immediately.  Because of the foreclosure moratorium there will likely be a flood of sheriff’s sales.

2. If you experienced a financial hardship due to COVID-19, you can obtain a forbearance.  A forbearance is a special agreement with your lender that delays foreclosure to your home because of missed payments. While some lenders may be willing to give you a temporary forbearance, you are still delinquent on your mortgage payments. Many homeowners expect to receive modified loan terms to help them get back on track with their mortgage, but lenders are not required to make those modifications.

Because of the temporary reprieve in mortgage payments, many homeowners are tempted to divert funds from your typical mortgage payment to help pay-off credit card and other consumer loan debts. When the reprieve ends and the mortgage company demands payment in full of all arrears, the homeowner has spent the money needed to bring the mortgage current on other debt. Don’t risk losing your home trying to service debts by neglecting your mortgage. A Chapter 13 Bankruptcy can help you keep your house while easily handling your other debts.

Why You Need to Act Now to Save Your Home

Once foreclosures are legally allowed to resume on August 31, 2020 homeowners will be scrambling to find financial help and mortgage relief. Here is why you need to act now to save your home:

• Mortgage companies and law firms will likely be overwhelmed with voluminous calls and requests for loan modifications and bankruptcy filings. Beat the rush and make sure your house is not foreclosed on while you wait for help.
• Don’t expect your lenders to forget about the missed payments during the moratorium period. You may find yourself with larger debts and more obstacles to overcome.

Acclaim Legal Services Can Help You Get Back on Track

Acclaim Legal Services can help you file a Chapter 13 Bankruptcy to reorganize your debt, force the mortgage company into repayment terms and keep your home legally protected from foreclosure throughout the process. Our experienced, caring lawyers can walk you through the process and explain all of the benefits of filing for Chapter 13 bankruptcy.

• A few benefits of filing for Chapter 13 Bankruptcy to avoid foreclosure include:
• You can still pursue loan modifications once you have entered into a Chapter 13 Bankruptcy, but the repayment plan gives you the legal protection you need from foreclosure proceedings. It also gives you the ability to reorganize debts and, in some instances, eliminate debt completely.
• All mortgage arrearages (missed payments) are paid back at 0% interest with no continued late penalties or interest charges.
• If you have a rental property, you can reduce the principal mortgage balance to current market value and own the property free and clear within 3 -5 years

Don't Delay Delay in Saving Your Home From Foreclosure

Receive a helping hand from Acclaim Legal Services and our experienced foreclosure attorneys. Schedule a free consultation using the form below or contact us at 866-261-8282. 

“ I was scared to death to go down this path of Chapter 13. After 13 short months from start to finish, I will recommend Acclaim Legal Services to anyone and everyone that I know who might be in the same situation I was in. Great job Acclaim Legal Services and Thank You!”   -John from Sterling Heights, MI

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