With unemployment continuing to run rampant due to the ongoing pandemic, millions of families across the country face an uncertain future regarding their homes. A recent survey by the Census Bureau shows that 18 million Americans are behind on their rent or mortgage payments, and up to 6 million of them expect to face eviction or foreclosure in the next few months.
Here in New York City, the situation looks equally tenuous for hundreds of thousands of residents. Although Governor Cuomo recently signed legislation extending the eviction/foreclosure moratorium until May 1, 2021, for those experiencing hardship during the pandemic, this measure provides only temporary relief. At some point, lenders and landlords will expect to be paid all that is due, and they will take whatever steps are available to them to collect—including eviction or foreclosure.
Being Proactive to Avoid Foreclosure
If you are currently behind on your mortgage payments due to the pandemic, “waiting it out” is not a wise course of action because, at some point, foreclosure protections will be lifted. The more steps you can take proactively during the moratorium, the better your chances of staying in your home when this grace period lifts. Let's explore a few options:
- Investigate other government relief programs. For example, the CARES Act did more than just provide monetary relief and temporary protection from foreclosure—it also established a mortgage forbearance program for homeowners with government-backed mortgages (i.e., FHA, VA, USDA, Fannie Mae, Freddie Mac). Check to see whether you qualify for this or other programs offered by the federal, state, or local government.
- Negotiate a forbearance agreement with your lender. In a forbearance agreement, the lender may agree to temporarily suspend penalties and reduce interest, as well as allow you to make lower payments for a time. It doesn't forgive the debt, but it helps keep the debt from becoming insurmountable.
- Look at refinancing options. If you can demonstrate to your lender that your situation is temporary and your long-term financial outlook is good, you may be able to refinance at a lower rate. If you have equity in your home, you may be able to use that equity to obtain lower payments.
Hiring an Attorney Can Be Helpful
Regardless of the options currently available to you, hiring a foreclosure defense attorney can provide extra protection. Negotiating through an attorney gives you more credibility with creditors, and a foreclosure defense attorney can explore legal options that provide you with additional protection if foreclosure becomes imminent. If you're facing possible foreclosure on your NYC home in the next few months, give our offices a call to discuss your options.