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COVID-19 Mortgage Debt Relief

Mortgage Debt Relief for Homeowners Impacted by Coronavirus
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Homeowners whose finances have been affected by the COVID-19 pandemic may find several relief options to alleviate their situation. For those struggling significantly, assistance may be available via suspended payments (forbearance), a pause on foreclosure evictions, loan modifications, or other remedies.

With the continued spread of the coronavirus pandemic and life coming to a screeching halt, the government and a vast number of lenders have stepped in to provide several relief measures for homeowners across the nation. 

With business closures and millions of Americans out of work, mortgage help for those having trouble paying their monthly payments are critical. The city of Miami was quick to act by suspending both foreclosures and evictions, and the state of Florida extended deadlines for property tax payments. 

Federal Assistance: 

At the federal level, the coronavirus rescue package helps homeowners by allowing banks to engage in forbearance without having to designate the mortgage loans as a troubled-debt restructuring for accounting purposes — and to protect homeowner’s credit score. This relief covers forbearance actions taken before 2020 or 60 days after the President lifts the national emergency declaration, and it extends during the duration of the loan. 

For those whose mortgages are owned by government-sponsored entities Fannie Mae and Freddie Mac, the mortgage servicer must evaluate each case for a forbearance of up to 12 months resulting from COVID-19 related difficulties. Under the forbearance, mortgage payments can be temporarily paused or reduced. Once the forbearance period is over, the servicer must work with the homebuyers on a mortgage modification loan, resulting in new monthly payments.  

Private banks are also offering relief. The majority of private banks offer forbearance anywhere from three months to six months, and upon the end of the period, provide various repayment solutions. Some of the repayment solutions include extending the loan term, or via a repayment plan. 

Assistance in Florida: 

In the state of Florida, Governor Ron DeSantis has authorized $250 million of the Coronavirus relief fund to be allocated to the Florida Housing Finance Corporation for families who have been negatively impacted by the COVID-19 pandemic. 

The funds will be used for rental and homeowner assistance programs such as new construction, rehabilitation, mortgage buy-downs, down payment and closing cost assistance, emergency repairs, and homeownership counseling. 

For homeowners who are suffering more permanent loss mitigation, options such as loan modification may be available. Fannie Mae and Freddie Mac, as well as, VA-backed loans can be modified as well. 

Miami-Dade homeowners who have been unable to pay their mortgage due to the Coronavirus outbreak should contact their loan service provider, a Miami civil trial attorney, or speak to a HUD-approved housing counselor for help navigating the options. 

At Graham Legal, P.A., we are a team of Miami Foreclosure lawyers and civil trial attorneys who can advise you about your legal rights under the federal mortgage servicing laws and help you navigate the state laws to protect your home. Please call us at (305) 445-9185 for a free consultation on the phone, video-conference, or in-person. We are here to help. 

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