The coronavirus has had a devastating impact on the lives of countless Americans. Many have fallen ill, and others have become unemployed and are struggling to meet their financial obligations. Congress has recently enacted new laws to help homeowners struggling to pay their mortgage because of COVID. To learn more about which option may be best for your specific circumstances, contact a Tampa bankruptcy lawyer to schedule a free consultation.
Mortgage Forbearance
A forbearance is when your lender suspends payments for a limited amount of time. Forbearance does not forgive or eliminate payments; it only delays them. Any missed payments during the forbearance period will need to be addressed when the forbearance ends. When the forbearance ends, the bank may demand the full amount of missed payments be paid in full within 30 days. If missed payments are not paid in full, and no other payment arrangements are made, the bank may file for foreclosure. If you are being threatened with foreclosure, contact a Tampa foreclosure defense attorney right away, time will be of the essence.
CARES ACT Mortgage Assistance For COVID
The CARES ACT was passed by Congress earlier this year to help alleviate the financial hardship caused by COVID. Under the CARES ACT, government-backed mortgages may be eligible for a mortgage forbearance of up to 180 days. In some circumstances, an additional 180-day forbearance may be granted as well.
The CARES ACT also prevents foreclosure until December 31, 2020. No foreclosure case for a government-backed mortgage may be filed until after December 31, 2020. If a foreclosure case was already filed, the CARES ACT would prevent the auction from occurring before December 31, 2020.
The protections granted under the CARES ACT only applies to government-backed mortgages. These include mortgages insured by FHA, VA, USDA, Fannie Mae, and Freddie MAC. Approximately 70% of all mortgages in the U.S. are government-backed loans. If the loan is not backed by the government, the CARES ACT will not require the bank to provide forbearance or delay foreclosure. To confirm if Fannie Mae insures your mortgage, click here. To inquire if Freddie Mac insures your mortgage, click here to access their lookup tool.
What Happens When COVID Mortgage Forbearance Ends?
Approximately 30 days before the expiration of your forbearance, the lender should send a notice describing your options. The options offered may include:
- An additional forbearance for up to 180 days,
- A repayment plan,
- Payment deferral, or
- Loan Modification
The options made available will be at the lender’s discretion. The CARES ACT does not require the bank to offer any of the above four options. Therefore, your bank may refuse to provide any additional assistance when the forbearance ends and elect to file for foreclosure. If you are at risk of foreclosure, contact a foreclosure attorney in Tampa, you may have options other than the CARES ACT to save your home.
Stop COVID Foreclosure With Chapter 13 Bankruptcy
Chapter 13 can allow homeowners to force the lender to accept a 5-year payment plan for the past due amount. The homeowner won’t have to pay the full mortgage in 5 years, only the amount that is past due. You don’t need to apply for a loan modification; you can force the bank into the 5-year payment plan.
Additionally, you can apply for a traditional loan modification as part of the Chapter 13 case. Chapter 13 modification applications are usually much different than when a homeowner applies. In Chapter 13 mortgage modifications, the U.S. Trustee is appointed to supervise the process. With much more oversight, the bank is less likely to cause unnecessary delays and wrongfully deny modification requests. Additionally, the Court can appoint a mediator and require the mortgage company to attend mediation with you. Mediation is a settlement conference with the bank, your attorney, and a mediator. A mediator is an independent person appointed to help with settlement negotiations.
How To Cancel a Foreclosure Sale in Florida
Immediately after a homeowner files for bankruptcy, an automatic stay will go into effect. The automatic stay requires all collection activity to stop immediately, including scheduled foreclosure sales. Even if a bankruptcy is filed just one minute before the auction, the foreclosure will be stopped. The bank will not resume a foreclosure until the court has lifted the stay.
Foreclosure Defense Law Firm in Tampa
At Florida Law Advisers, P.A., we understand that these are challenging times. Too many Americans are getting ill, losing their job, and falling behind on bills. If you are struggling with debt, we may be able to help. Regardless, whether you need help with Chapter 13, Chapter 7, or other forms of debt relief, our professional legal team can help. Call us now at (800) 990-7763 to speak with a foreclosure defense attorney in Tampa. Our initial consultation is free and can be done over the phone.
Frequently Asked Questions
Often, after a foreclosure auction, there will not be enough funds from the sale to pay the loan in full. In cases such as these, the bank may sue the borrower for the remaining balance (deficiency). Additionally, the bank will usually add interest, late penalties, and legal fees onto the balance. However, a Chapter 7 or Chapter 13 may be able to stop the bank from suing you and discharge the debt in full.
Yes, homestead property (primary residence) is protected in both Chapter 13 and Chapter 7 bankruptcy. Therefore, you may not have to lose your home as a condition of bankruptcy. Additionally, you can apply for a mortgage modification or force the bank to give you 5 years to pay the past due amount with Chapter 13.
Yes, when a Chapter 7 or Chapter 13 case is filed an automatic stay is instantly put into effect. The automatic stay is a federal law that stops all forms of collection activity, including foreclosure auctions already scheduled to occur.
When forbearance ends, the bank may demand the full amount of missed payments be paid in full within 30 days. If missed payments are not paid in full and no other payment arrangements are made, the bank may file for foreclosure.
The CARES ACT was passed by Congress earlier this year to help alleviate the financial hardship caused by COVID. Under the CARES ACT, government-backed mortgages may be eligible for a mortgage forbearance for up to 180 days.
Yes, forbearance does not forgive or eliminate payments, it only delays them. Missed payments during the forbearance period will need to be addressed when the forbearance ends. When the forbearance ends, the bank may demand the full amount of missed payments be paid in full within 30 days.
A borrower can become eligible for a mortgage with Fannie Mae after only two years have passed since a bankruptcy discharge. Moreover, if a debtor makes 12 consecutive Chapter 13 payments they may be given permission to increase their debt. The increase in debt may even include obtaining a new mortgage.
Yes, Florida law does allow HOA’s to file for foreclosure. In many ways, it is a lot easier and quicker for an HOA to foreclose on a home than a mortgage company. Therefore, if you are being threatened with foreclosure from the HOA you should contact an attorney right away.
The CARES ACT prevents foreclosure of government-backed mortgages until December 31, 2020. If a foreclosure case was already filed, the CARES ACT will prevent the auction from occurring prior to December 31, 2020. However, this only applies to government-backed mortgages.
A forbearance is when your lender suspends payments for a limited amount of time. Forbearance does not forgive or eliminate payments, it only delays them. Any missed payments during the forbearance period will need to be addressed when the forbearance ends.
In a Chapter 13 case, you can apply for a loan modification. You can also contact the bank directly to apply for a loan modification. It is not required to hire an attorney to modify your mortgage, but it may help to make the process easier and increase your chances of approval.
Chapter 13 bankruptcy gives homeowners the opportunity to reorganize their mortgage debt into one manageable payment. In addition, it may provide up to five years to catch up on missed mortgage payments without being charged additional interest.
