Are you financially stressed right now? What to know about options, from debt negotiation to bankruptcy
This short video from the Consumer Financial Protection Bureau “CFPB” is actually very informative and goes over the various options for homeowners who have received a forbearance. If the homeowner is not in Chapter 13, contacting their servicer or discussing their options with a HUD approved counselor is their best course of action. If the homeowner is in Chapter 13, they need to contact their attorney (you) for advice.
This video (click here) explains basic options dealing with your mortgage, paying back missed payments once a forbearance end. Remember that it is very important to know what type of mortgage loan you have because each type (federal, conventional or private) have different processes or options or no options at all.
Some mortgage companies misled borrowers about forbearance, regulators say (Bankrate, Feb. 2, 2021)
How to help homeowners protect their homes (from CFPB) 11/10/20
Excerpt from the article:
How forbearance is supposed to work
Under the CARES Act, forbearance is straightforward. Essentially any borrower who wants forbearance can get it.
The pause on payments applies to anyone with a government-backed loan. Borrowers can apply for forbearance and get a 180-day break on payments with no penalties and no late charges. The missed payments are simply added to the end of the loan.
Borrowers can ask for an additional 180 days of forbearance. The CARES Act covers loans held by Fannie Mae or Freddie Mac or issued by the Federal Housing Administration or the U.S. Department of Veterans Affairs.
The CARES Act didn’t address jumbo loans, non-QM loans and other mortgages held by lenders or owned by private investors, but many banks voluntarily offered 180 days of payment relief.
The generous terms of forbearance are a sharp contrast to the mortgage industry’s response to the housing crash and the Great Recession. During that crisis, borrowers struggled to win relief from their loans, and foreclosures soared.
MUSINGS BY DIANE:
My favorite client, or prospective client, is someone who wants to learn as much as possible about their situation, so they can make informed decisions. Finances are confusing and everyone needs to take time to determine the best way to find a solution that works in the long run, not just today. Never rely on the Internet for advice – there is more bad advice than good. Always seek advice from at least two people or resources who are experienced in the area you need help. Know both the pros and cons of your options. Once armed with good information, then use your common sense to decide what is best for you.
– Diane L. Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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