During the pandemic, millions of homeowners fell behind on their mortgage payments and the federal and state governments provided many options for relief. Now many of those programs have expired, or are set to, but many people are still facing economic hardship. Recently, the Biden Administration announced a new program in an attempt to prevent a sharp increase in foreclosure cases in the next few months by lowering the mortgage payments for millions of homeowners.
Unfortunately, not all homeowners in Broward County will be covered under this new program. For these individuals, it is important to know that there are other ways to lower your mortgage payments if you do not qualify for the federal program.
The New Government Program
On July 23, the Biden Administration announced that loans backed by the Federal Housing Administration and other federal agencies to extend the term of all mortgage loans. This means locking in interest rates, as well as offering lower monthly principals. According to the Urban Institute, approximately 75 percent of new mortgages are backed by the federal government.
The changes are intended to help homeowners who entered into a forbearance program during the pandemic, allowing them to not make mortgage payments for a maximum of 18 months. Now that many of those programs are set to expire, and people still have not gotten back on their feet financially, millions of homeowners will soon face foreclosure, and that is something the new program is meant to remedy.
According to Black Knight Inc., approximately 1.55 million people are seriously delinquent with their mortgage payments, which means they have not made a mortgage payment in at least 90 days. The majority of these homeowners have a forbearance plan and are most at risk for foreclosure in the coming months. They make up approximately 2.9 percent of the 53 million mortgages in the country, which is down from a record of 4.4 percent in August and September of 2020.
While the new program does bring relief for millions of homeowners, it sadly does not cover everyone. Homeowners who will not be provided protection under this plan should know the other methods that can help them lower their monthly mortgage payments.
Contact the Lender
Many people often think to first turn to other options when trying to avoid foreclosure or lower their monthly mortgage payments, and they do not think to contact their lender. In fact, this is a mistake. Contacting your lender and asking about the different options that could lower your monthly payments is a critical, and often overlooked, step when trying to reduce your payment. Contrary to what many people think, your lender is not against you and does not want to foreclose on your home. They are much more likely to try and offer a remedy that will work for you and them both.
While speaking to your lender is the first step you should take, you should not do it alone. A foreclosure defense lawyer in Broward County will have the necessary experience to speak to your lender with you or on your behalf and can even negotiate for a lower amount.
A lawyer will also advise on whether you are eligible for a lower rate. To qualify, an individual must:
- Ask for the lower amount they are seeking,
- Be in good standing with their mortgage currently, and
- Use the money for their primary residence
When a person meets the above criteria, lenders are likely to grant a lower rate. However, you cannot count on your lender to contact you and offer you one. Lenders will only provide this relief to individuals that qualify, and that ask for help.
Consider Refinancing Your Mortgage
For many homeowners, the best option is to refinance their mortgage. Unlike a forbearance plan, which allows you to defer your mortgage payments to a later date, a refinance essentially gives you a whole new loan. When you refinance your mortgage, you can receive a new loan that changes the interest rate, the term of the loan, and even the principal balance. There are many free online tools that will allow you to determine if refinancing your current loan will lower your monthly payments.
For homeowners who are considering a refinance, there is perhaps no better time than now. Mortgage rates are at record lows, or nearly there, and offer the bulk of homeowners who have not refinanced their home loans to lower their monthly mortgage payment. When refinancing, it is best to compare multiple lenders in order to get the best interest rate.
Consider a Loan Modification
If your income level has dropped but you are still employed, you should consider applying for a loan modification. Unlike refinancing, a modification will leave you with your current loan, but with certain terms changed. Loan modifications have many benefits over refinancing, including that they do not require a credit check, and there are often not costs incurred that are associated with refinancing.
Again, when seeking a loan modification, it is important to work with a foreclosure defense lawyer in Broward County. Foreclosure defense lawyers are highly experienced in negotiating a loan modification and can help you secure the lowest amount possible, and show that your income can support it so you do not end up in the same position in the future. Lenders are typically likely to offer a loan modification, as they do not want to deal with the costs and headache of foreclosure, either.
Call Our Foreclosure Defense Lawyers in Broward County Today
If the COVID-19 pandemic has resulted in financial hardship to you and your family and you now need to lower your monthly mortgage payment, or you are facing foreclosure, our Broward County foreclosure defense lawyers can advise on your case. At Loan Lawyers, we know how to negotiate with the lenders in the area, and will provide the sound legal advice you need. Call us today at (954) 523-4357 or contact us online to schedule a free consultation.
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Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.
