Irvine Attorney/Realtor for Loan Forbearance
Professional Relief Guidance in Los Angeles, Orange, and San Diego Counties
When you suddenly lose your job or experience an abrupt rise in expenses,
you may be fairly concerned about how you will make your regular mortgage
payments. A serious injury requiring costly medical care or a natural
disaster that results in substantial damage to your property can also
leave you in a vulnerable financial position.
Many lending institutions and mortgage servicers offer forbearance options.
This allows homeowners experiencing hardship to pause or temporarily reduce
mortgage payments. Many have relied on forbearance programs to delay or
reduce payments during the COVID-19 crisis.
It is important to understand, however, that forbearance does not erase
or lower the total amount owed on your mortgage. You will eventually have
to repay whatever payments were deferred, so it is important to have a
plan for safely exiting a mortgage forbearance.
Our Irvine loan forbearance Attorney/Realtor at Lawyers Realty Group has
over 30 years of experience can provide the professional guidance that
you need when navigating these difficult situations. We can help you understand
your options and develop a strategy that will help you keep your home.
How Requesting a Loan Forbearance Works
If you have been regularly making your mortgage payments, obtaining mortgage
forbearance is often relatively easy. In many cases, you need only speak
to your servicer – the bank or lending institution that manages
your payments – and inquire about forbearance options.
Typically, you will need to provide some explanation for why you are requesting
forbearance. Common reasons include:
- A sudden loss of income
- An injury or illness requiring medical care
- A disaster like a flood, tornado, hurricane, or earthquake
Many were able to secure forbearance throughout the COVID-19 crisis if
the state pandemic restrictions resulted in their being unable to work.
You should avoid entering a mortgage forbearance program without understanding
how you will eventually exit it and resume regular payments. Many servicers will allow forbearance but will not inform homeowners
of the terms, conditions, and caveats of delaying or reducing payments.
This failure is a violation of federal law and you need and Attorney/Realtor
to assist in securing your rights.
Safely Exiting a Loan Forbearance
Forbearance does not last forever. Most forbearance options last for 6
months with the ability to extend for another 6 months, but the CARES
Act and other COVID-19-related legislation have allowed for additional
extensions in some circumstances. Sooner or later, you will need to make
up the missed or reduced payments.
If you can't repay the missed amounts, you will need to
seek a loan modification to allow for those payments to be addressed over time. This is not always
possible, and the servicer does not have to agree to any modification.
As you consider whether to ask for forbearance, you may be wondering:
- Do I have to cure missed payments in one large lump sum after the forbearance
- Will my monthly mortgage payment amount change as a result of forbearance?
- What if I suffer a semi-permanent loss of regular income during the forbearance period?
- Will the delayed payments be counted as “late” and be subject
to interest and late fees?
- What impact does forbearance have on my property taxes and insurance?
How We Can Help
Our Attorney/Realtor can help you understand the implications of pursuing
and exiting forbearance. We can assist you in negotiating with your servicer
and explore all potential exit options.
Safe exit strategies for mortgage forbearance that we can help you explore include:
Lump-sum payments - If you have available funds from savings, investments, a retirement account,
or some other source, you can pay the entirety of the forbearance amount
in a single transaction. After the forbearance amount is settled, you
will resume paying your previous, regular monthly mortgage payment amount.
For many, this option is not feasible. Note that California homeowners
cannot be required to make a lump sum payment if their mortgage is held
by a GSE, Freddie Mac or Fannie Mac.
Repayment plans - Another arrangement involves augmenting your regular monthly mortgage
payment with a portion of your forbearance amount. Increased payments
continue until the entirety of the forbearance amount is settled, after
which you resume making payments at your previous rate. These plans can
vary wildly in length and amount and are often negotiable.
If you are struggling to make mortgage payments or are concerned about
how to exit your forbearance, call
(949) 264-0966 or
contact us online to speak to our Attorney/Realtor today.