What to Do When Your COVID-19 Loan Forbearance Expires

In response to the COVID-19 crisis, the federal government passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provided a forbearance for struggling homeowners and other consumer protections. However, these protections via forbearance are expiring soon. Here is what you need to know about this issue and your options for mortgage assistance.

COVID Forbearance Protections Under the CARES Act Are Expiring

The CARES Act provided certain homeowner protections that were originally set to expire by June 30, 2021. However, the U.S. Federal Housing Administration (FHA) has announced it is extending the moratorium on foreclosure actions through July 31, 2021, joining with other federal agencies that are taking similar actions. The moratorium applies to the following types of properties:

• FHA-insured single-family mortgages for properties that are not vacant or abandoned
• Multifamily FHA mortgages that have been current on payments as of Feb. 1, 2020
• USDA Multifamily Housing Communities
• FHA, Fannie Mae, or Freddie Mac-owned real estate owned properties they acquired through private mortgage lenders via foreclosure or deed-in-lieu of foreclosure transactions
• Fannie Mae and Freddie Mac-owned single-family mortgages

Homeowners have until Sept. 30, 2021 to request mortgage forbearance if they have not already done so. Mortgage servicers generally cannot foreclose on properties unless the mortgage is more than 120 days past due, but there are exceptions. Typically, a loan servicer will contact the borrower at least 30 days before their final forbearance period ends to discuss additional mortgage assistance options.

4 New Borrower Protections

Additional borrower protections that were put in place include:

• Borrowers must have a meaningful opportunity to apply for options that allow them foreclosure defense.
• Services can offer COVID-affected borrowers streamlined loss mitigation applications without having to apply for every possible type of loan modification.
• Providers must give additional information about the availability of loss mitigation options to certain delinquent buyers after initiating contact with the homeowner.
• Loan servicers must notify borrowers in forbearance due to a COVID-19-related hardship at least 30 days before the forbearance expires of this fact and to inquire if the borrower wants to complete the loss mitigation application.

These consumer protections are intended to give borrowers a meaningful opportunity to pursue other available options to avoid foreclosure, speed up the process, and inform borrowers of their options.

Depending on the particular circumstances involved and your loan service provider, you may be able to defer your missed payments to the end of your mortgage, pay back a portion of your missed payments over the course of a year, receive a loan modification that lowers your monthly payment through a lower interest rate, lower principal balance, or longer mortgage term, or sell your property.

Get A Loan Modification or Foreclosure Defense Lawyer 

If your forbearance is expiring and you are concerned about how you will make up your payments, Loan Lawyers is here to help. We are a foreclosure defense, debt defense, and bankruptcy law firm. Our experienced Fort Lauderdale foreclosure defense lawyers will help you determine the best solution for you, based on your individual needs and circumstances.

We have successfully helped over 7,000 people get out of debt and get a fresh start, saved over 3,000 homes from foreclosure, eliminated over $100 million in mortgage principal and debt, and won over $25 million for our clients for bank, loan servicer, and debt collector violations. Contact our Florida foreclosure defense lawyer to begin the process of relief.