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You may have received a letter in the mail from your mortgage company regarding your mortgage forbearance program. If you're like most people, you probably ignored it and put it in the trash. This is a big mistake. Though mortgage forbearances can be a helpful program, it often comes with many hidden fees and hoops to jump through. This blog post discusses mortgage forbearances, how they work, and what you need to do to avoid foreclosure.
Understanding Mortgage Forbearance
Mortgage forbearance is a program offered by many mortgage companies that temporarily allow homeowners to stop making payments on their mortgage. This can be helpful if you are experiencing financial hardship and need time to get back on your feet. According to a New York Federal Reserve Bank study, over nine million households have utilized mortgage forbearance programs provided by the CARES Act since the start of the pandemic.
Reading the Fine Print
Though mortgage forbearance has served as a needed financial relief for millions of homeowners, many unfortunately lose their homes to foreclosure due to not reading the fine print. When your forbearance ends, you'll need to resume making payments and developing a repayment strategy for the missed mortgage installments. Additionally, during the forbearance period, interest continues to accrue on your loan.
Because your loan servicer may start the foreclosure procedure if you don't have a repayment plan, establishing one is an important step in avoiding losing your home. Due to a lack of knowledge of the program, there are currently many people who received mortgage forbearance and may lose their homes as a result. There's no consistency since each mortgage company is different, making it tough to compare apples to apples.
How to Exit Mortgage Forbearance
If you're approaching (or have already passed) the end of your 18 months of forbearance protection, it is essential to keep in touch with your lender. There's no consistency in the way lenders are handling things, so the best way to find out your options is to talk to yours directly.
It is highly recommended to consult with a foreclosure defense lawyer to guide you through the process. A foreclosure defense lawyer will ensure you are taking the best steps for your situation and negotiate with your mortgage company on your behalf.
Contact Our Colorado Foreclosure Lawyers
At Wagner Law Office, P.C., our foreclosure lawyers have extensive experience helping homeowners in Colorado keep their homes. We understand the ins and outs of mortgage forbearance programs and can help you navigate this complicated process.
If you are at risk of foreclosure, we can help. Don't hesitate to contact us today through our website or give us a call at (303) 536-5124 to schedule a consultation.