According to the Mortgage Bankers Association, approximately 1.5 million homeowners are currently in some sort of forbearance plan. Starting in 2020, US banks have been unable to foreclose on homes in an effort to provide assistance to homeowners experiencing financial distress caused by the pandemic. On September 30, this protection to homeowners ends.
Now that the foreclosure moratorium is ending, lenders can proceed with foreclosures for borrowers who have abandoned their properties or have not responded to outreach from their mortgage providers.
The Consumer Financial Protection Bureau says that if you received forgiveness under the Cares Act and you are still struggling financially due to the pandemic, you may be eligible to receive an extension.
When should I get started?
You should start asking for assistance as soon as possible. The Biden administration has extended forbearance enrollment through September 30, 2021 for government-backed loans, which amounts to around 75% of all mortgages.
To learn more about the mortgage loan types, check out this informative blog.
The extended forbearance could last up to 12 months. However, you can only get an extension as long as you haven’t reached the maximum months of forbearance, which is 18. If you began forbearance last spring, your 18-month maximum will be this fall.
What happens if I reached the maximum and still can’t afford to make a payment?
If you are still experiencing financial hardship, your mortgage servicer should be having the conversation with you about repayment or other options when they reach out to you, according to a Consumer Financial Protection Bureau (CFPB) rule. The agency also says that – with the exception of limited circumstances – servicers can’t start the foreclosure process before January 1, 2022. Your mortgage servicer has to reach out to you first, examine your situation and then explore options to help you avoid foreclosure.
If you are needing mortgage refinancing assistance due to the foreclosure moratorium coming to an end or want to see what you qualify for, Senior Loan Officer Keith Eickenhorst is here to help you find options that are right for you. Visit his site today to learn more about your options!
- Lenders are now able to proceed with foreclosures.
- If you are still struggling financially, your mortgage provider may be able to help you refinance your mortgage payments.