With the CARES Act you are entitled to a forbearance of your mortgage.
That is a year of no payments, no bank penalties, no bank fees … no foreclosure and no sale.
A year for you to get back on your feet, make important life decisions and maybe, modify the loan when you are able to do so as you reset your financial life over the next 12 months.
Read the below carefully because there is a tight deadline here, only until December 30. If you want your forbearance, you need to take advantage of the situation very soon as there are only nine weeks left.
This. Is. Big.
The law is a complex, ever changing living organism. That’s the best way I can describe how I feel about it.
The CARES Act is new. It is a big, big change. It should be, since it was designed to save people from complete disaster.
But it is new, and it is HUGE (or, YUGE, because we are in New Jersey) and it is so complex. So complicated and new that most attorneys, even those who work with it on a daily basis now, have not fully read it.
There is a MASSIVELY powerful tool baked into the law that even I missed until a few days ago. I can save people’s homes in a dramatic way now, even if you are on the verge of a sheriff sale.
Even if you have been in foreclosure for years and years.
Here is how it works:
- If you have a ‘covered loan’, which means if you have a government backed mortgage loan (more on that in a bit);
- and you request a forbearance before December 30, 2020,
- you are entitled by the Act to a forbearance of up to a year.
Here’s the catch, and there are two:
- First, you have to have a government backed loan, which means your loan has to be owned by Fannie Mae, Freddie Mac, Ginnie Mae, or is a VA or FHA loan. If you don’t know who owns your loan, reach out to me and I can help you.
- Second, the servicers REALLY do not want you to use this forbearance, especially if you have been in foreclosure for a long time and are facing a sheriff sale. I discussed the statute and how I read it with a colleague who represents mortgage servicers. As he put it: “Oh my God. If you are right, my clients are all F****ed!”
Yeah, I think they are.
But they are going to fight hard on this. There is no case law, yet, but The CARES Act specifically states that the right to forbearance applies to everyone who owns their home … meaning before the sale of the home.
The servicers are going to fight this, and you should not apply for this forbearance on your own. This is especially true if you are nearing a sale date.
The forbearance notification should be made only through a Request for Information formally putting the servicer on notice through the Real Estate Settlement Procedures Act that you are exercising your right to the forbearance.
The reason this is important is because if you work with an appropriate and experienced attorney to set up the request for the forbearance, if the servicer refuses it they are almost certainly walking into a federal lawsuit for violation of RESPA. That is the only mechanism for enforcing your rights to the forbearance.
Again, remember the deadline is December 30. That’s only nine weeks. If you want your forbearance, contact me ASAP!
