Many mortgage borrowers strapped for cash and find it financially difficult to keep up with all the monthly payments often see foreclosure on the horizon. When one missed payment after another, it piles up, then lenders have no choice but to take back the mortgaged property due to failure to keep up with their agreed terms.
Meeting monthly payments amidst the COVID-19 pandemic is more challenging than ever for anyone—even for the affluent, especially since the outbreak has left many hardworking individuals unemployed as businesses took one of the hardest hit during these tough times.
The good news is that the economy cares for its people; that’s why financial institutions employed the new Mortgage Servicing COVID-19 rule from August 21, 2021, onwards. It’s a silver lining for people nearing foreclosure as the new rule strives to temporarily halt or lower mortgage payments as society is still recovering from the pandemic.
Understanding the 2021 Mortgage Servicing COVID-19 Rule
Under the new rule from the CARES Act, mortgage services extend their help by easing the terms borrowers need to meet throughout their repayment period. While that doesn’t mean you’re free from financial obligations, the new rule gives borrowers from all walks of life the chance to explore different options to prevent foreclosure.
Remember that forbearance doesn’t start automatically, so be sure to contact your lender first before you pause your monthly payments. Requesting for more options is easier for people, too, since the new rule also encourages mortgage service providers to provide solutions without submitting and organizing applications.
The new mortgage rule also states that by January 1, 2022, all services need to reach out to borrowers and offer different options to ease their financial burdens before proceeding with the foreclosure process if both parties fail to reach a satisfactory conclusion.
If you’re in forbearance, know that mortgage providers need to notify you about the end of your forbearance program, offer repaying solutions for your missed payments to mitigate a foreclosure, along with additional details on how to acquire free housing counseling services.
Who is Eligible for the 2021 Mortgage Servicing COVID-19 Rule?
Federal forbearance programs cater to federally backed mortgage borrowers, but the new rule issued in August 2021 now allows all kinds of homeowners to seek financial assistance and join the forbearing program with the exception of borrowers with home-equity lines of credit, open-end lines of credit, investment properties, and reverse mortgages.
The Bottom Line: Avoiding Foreclosure and Recovering from the Blow of the Pandemic
If you’re worried about foreclosure, you can jumpstart your forbearance closure by consulting with your lender so you can find ways to pick your finances up during this time of need.
Are You Looking for a Personal Finance Company in Oak Lawn?
We strive to make it possible for everyone to achieve their goals of settling down; that’s why we offer a wide range of mortgage products for first-time and returning homebuyers with low down payment options.
From FHA, VA, conventional, refinancing, to jumbo mortgages, get in touch with us today at (708) 237-4050 to see what we can do to get you the keys to your dream home.