There will be a great need for mortgage relief and foreclosure prevention in Massachusetts and the entire country. The CFPB stated today “we are at really an unusual point in history”. Nobody has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time.”
This may be the calm before the storm. If mortgage companies don’t get it right when all these forbearance periods end.
With stimulus money and no federal student loan payments, people have been able to firm up their finances. People are paying off car loans, clearing off credit card debts or other old debt. Many are actually establishing a savings account for the first time in a long while.
The CFPB hopes to have a plan to prevent a sharp rise in foreclosures this fall. The present proposal would:
The deadline for borrowers affected by Covid-19 to request or extend a forbearance plan is June 30. This is also the end of a foreclosure moratorium on federally backed mortgages. For borrowers who are behind in mortgage payments now, it’s imperative to act before June 30 to ask for a 180 day forbearance, and if needed, a second 180 day forbearance. This will get you a year. If that isn’t done, then the new CFPB rules would at least block servicers from filing a foreclosure lawsuit until after December 31, 2021.
The new rules if they are approved, will apply to all mortgages, not just those that are federally backed.
Certain fees such as late fees and stop payment fees would be waived. If a loan modification were to include any catch up payments, servicers will not be allowed to charge extra fees or interest on those payments. The new rules would be in effect until August 31, 2022 but may not apply to smaller lenders with less than 5,000 loans.
If you have the threat of a foreclosure, you can call us anytime or visit our website for more information.