Congress passed the CARES Act in response to Covid-19, to help individuals and companies suffering financial hardship as a result of the lockdowns and economic uncertainty caused by the Pandemic. In particular, the CARES Act provided mortgage relief in the form of payment suspension or forebearance on federally-insured mortgages for up to a year.
In other words, customers that contact their mortgage servicer can request suspension of mortgage payments for up to 180 days, and extend that suspension period for an additional 180 days, if needed. Unfortunately, there was nothing built into the legislation requiring mortgage companies to simply allow resumption of mortgage payments and deal with the missed payments. The problems that clients will face will involve resuming the monthly mortgage payments, and also dealing with a mountain of a full year or missed payments. While this writer believes mortgage companies will develop programs allowing customers to catch-up their mortgage payments over time, there are no guarantees that customers that have missed payments due to the CARES Act will be allowed to catch up payments in a reasonable period of time. If mortgage companies demand a lump sum payment from mortgage customers, the risk of foreclosure will be severe.
For customers that have been unable to make their mortgage payments for the 12 months allowed by the CARES Act, it is possible that mortgage servicers may be unwilling to renegotiate mortgage payments. In that case, mortgage customers may face the possiblity of loss of their home through foreclosure proceedings. If you are not sure how to deal with your mortgage company when your mortgage payment suspension period ends, call us to find out your options. We may be able to help you negotiate a foreclosure forebearance agreement that allows you to keep your home, assist you with requesting a loan modification, or discusss bankruptcy options which will allow you to stop a foreclosure and restructure your home loan. The CARES Act also provided additional bankruptcy protections to Chapter 13 bankruptcy, which we can explain during your free initial consultation.
On of the main benefits to Chapter 13 bankruptcy is the ability to restructure delinquent debts on secured loans like homes and cars. We frequently are able to come up with an affordable plan to help clients keep their homes and cars, even though they may be behind on payments. As an additional benefit, Chapter 13 also frequently allows clients to wipe out credit card and medical debts, while keeping their home and cars. Call today to find out your rights. (501)224-2928.
