As the Biden Administration takes office, they will seek to immediately pass comprehensive relief legislation. The proposed relief legislation includes a foreclosure moratorium for homeowners. As millions of mortgages are now delinquent due to the pandemic, a moratorium offers welcomed short term relief. However, you should understand that a moratorium only buys time. If you have experienced a loss of income that is not likely to return any time soon, you should start looking for solutions now. That is why homeowners who are struggling with their mortgage payments should look at loan modification and reinstatement options now.

You should take a proactive approach to a troubled mortgage. Once the foreclosure process has begun, it is more difficult to negotiate with your lender. At that point, your lender has already incurred costs of foreclosure, which are typically added to your outstanding balance. The point is, you don’t want to let things go that far. The fact is, many loan modification and reinstatement programs are still available, and new ones are being created. A loan modification can reduce your mortgage payment to fit your budget, and be customized to fit your particular situation. Reinstatement plans give you a chance to start fresh with your regular payments, by adding the arrears to the end of the loan.

How Long Will a Foreclosure Moratorium Last?

While we do know that the Biden legislation includes a foreclosure moratorium, we don’t know how long it will last. Obviously, the idea is to protect homeowners until the economy returns to some semblance of normalcy. Accordingly, it would make sense that the moratorium would last through summer or thereabout. So, does that mean you have until the end of the moratorium to act? Well, only if your plan is to forfeit the house to foreclosure. If your intention is to stay in your home, then you need to come up with a plan and start right away.

Look, mortgage lenders are facing another crisis. They know that millions of Americans have fallen behind on their mortgages through no fault of their own. In the vast majority of cases, lenders would prefer to avoid foreclosure, and create an affordable solution that both sides can live with. The available solutions and terms vary widely. That is why we have always advocated attorney representation for troubled mortgages. We offer access to foreclosure defense and loan modification attorneys across the country and we have been doing so for more than a decade. They offer a free consultation and payment plans customized to fit your needs. Even if you are not sure of your options and simply have questions, feel free to give us a call.

-Michael Powers