COVID-19, also known as the coronavirus, has created an economic disruption unseen since the Great Depression. There are many people who are unemployed who, through no fault of their own, have fallen behind on their mortgage payments. There are several ways to catch up on missed mortgage payments. One way is to make the payments. Another way is to seek a forbearance agreement from the bank which will permit a short period of time to catch up on the missed payments. However, depending on your interest rate and the amount of time that you would need to catch up on missed payments, a loan modification may be the best strategy.
Loan modifications first became official during the Obama administration. Even without being legally required, the lenders are routinely entering into loan modifications in lieu of foreclosing on properties.
A loan modification often allows the interest rate to be reduced and for the missed payments to be re-amortized into the existing loan. Depending on the interest rate adjustment, your future mortgage payment could be less than it is now even after including missed months into the re-amortized loan.
Our law firm has been assisting clients with loan modifications for over 10 years and can advise you regarding your ability to potentially have your loan modified.