Understanding Options As Federal Forbearance Programs Begin To Wind Down

More than a year into the COVID-19 pandemic, many borrowers across the country are still struggling with their household finances and are worried about how they will afford to make mortgage payments again. The protections put in place by the CARES Act have prevented a massive foreclosure crisis for the time being, but many of those protections will likely come to an end this fall. It is important people are aware of what rights they have under these programs and take proactive steps to make sure their loan servicer is honoring all programs put in place to keep people in their homes. 

It is almost certain there will be a very large number of people needing mortgage assistance at the end of the federal forbearance period. Many people are already receiving calls or letters from their loan company advising them that their forbearance period is ending and that payments will soon be due. They may even be telling homeowners that their credit could be impacted soon if payments do not resume.  

Borrowers should do research and make sure they understand all of the protections that apply to their specific loan. Do no take the loan company at their word if they tell you there are no options and be persistent in seeking out information, especially if you are still having financial problems due to the pandemic. Failure to do so could lead to credit damage and eventual foreclosure. 

Make sure to take notes about each phone call with the loan company. Write down the date of the conversation, which person you spoke with and the details of the conversation. Definitely keep copies of all correspondence you receive in the mail, especially statements and letters. In the event there is an issue, this information will be critical for an attorney to review in connection with defending your home from a potential foreclosure.