COVID-19 Forbearance Repayment Lawyer in Long Island
The COVID-19 pandemic has left a trail of consequences that have affected many families. With jobs being lost and difficult to replace, people are finding it hard to live life the same way they did before the pandemic. If you are struggling to pay your bills and are worried that you will soon be facing a foreclosure, you may be considering a mortgage forbearance.
What is Mortgage Forbearance?
When you have a hard time making your mortgage payments due to unprecedented or unpredictable circumstances, such as those brought about by the COVID-19 pandemic, you may be entitled to stop making your mortgage payments under New York State Emergency COVID-19 guidelines. To do this, you need to contact the lender directly and see if you qualify for a period of forbearance.
Mortgage Forbearance COVID-19 Options
Just because your mortgage lender offers the possibility of a forbearance, it does not mean that this is a solution that can be applied in the same way to everyone who requests it. A mortgage forbearance is a complicated process that must take several factors into account. These are:
- What type of loan you have, how much you owe, and how many years you still have on it.
- What owner or investor requirements are associated with your mortgage loan.
- Who your mortgage servicer is.
Repayment of Mortgage Forbearance Payments
Forbearance does not mean the payments are forgiven. Different lenders provide different forbearance options, but the most common repayment options are: (a) all payments due one month after forbearance ends; (b) all payments due as a balloon payment upon the maturity of your loan; or (c) the term of your loan is extended for a period of time equal to the forbearance period.
Most borrowers would prefer that their loan term be extended by an amount of time equal to the forbearance period, but that isn’t always an option. Although a period of forbearance may allow a borrower to get back on their feet financially, it is extremely difficult to come up with a large lump sum payment immediately after the forbearance period ends. In fact, it would seem completely contrary to the purpose of the forbearance – which is allowing people facing a financial difficulty to use the money they would typically pay their mortgage with for more necessary items, such as food, clothing, and childcare.
However, if your bank does structure a forbearance with a repayment due after the final month of forbearance, you may have over options. Chapter 13 bankruptcy provides borrowers to repay mortgage arrears – including amounts incurred over a forbearance period – over sixty (60) monthly payments. This means that a forbearance period of six (6) months would only require a monthly repayment of approximately 1/10 your monthly mortgage payment, and a forbearance of twelve (12) months would only require a repayment of approximately 1/5 your monthly mortgage payment. Chapter 13 does come with its own guidelines, and borrowers interested in filing a chapter 13 should contact Macco Law Group, LLP to see if they qualify.
It is never too early to plan for repayment of the forbearance amounts. Macco Law Group, LLP can structure a chapter 13 plan prior to the end of your forbearance term so you are prepared for the future Schedule an initial consultation with our Covid forbearance lawyer in Long Island from the Macco Group, LLP today. We will gladly review your documents, understand your financial situation and prepare a strategy to present to your lender. It can make all the difference between continuing to struggle on a monthly basis and sleeping well at night. Call us today.