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  • Brian M. Miranda, Esq.

Not being able to pay your mortgage keeping you up at night???

The recent coronavirus pandemic has seen millions of people lose their jobs or be furloughed indefinitely by their employer. Consequently, many Americans have faced difficulties or are simply unable to make monthly mortgage payments. On March 27, 2020, the Trump Administration signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law, which allows any homeowner with a federally backed mortgage loan to get a forbearance by asking and affirming a hardship caused by COVID-19 to their lender. Under, a forbearance agreement, you are free from foreclosure and the mortgage lender agrees to suspend your payments or reduce them for a set amount of time.


In the case of the recent CARES Act, that set period of time amounts to 180 days, and can be extended up to an additional 180 days. It is often the case however that forbearance agreements simply suspend your payment without erasing past debts. For example, a mortgage lender might simply suspend your payments six months, and when those six months are up require you to make the full six months of mortgage payments.


To discuss a bit further, a loan modification agreement is another form of relief that borrowers facing economic hardship can use to avoid foreclosure. This agreement permanently changes the terms of the mortgage, usually through a reduction of interest rates and an extension of the length of the loan.

To apply for a loan modification package, the borrower must fill out a series of forms that prove their inability to pay their current mortgage. While some forms can vary from lender to lender, they often include your most recent tax returns, bank statements, pay stubs, and a hardship letter explaining your situation. Upon applying, the lender will then review your application and determine whether you qualify for assistance.


After that, you will have a trial period of reduced payments to demonstrate that you can afford the new mortgage. The process of applying for a loan modification is often incredibly tedious, bureaucratic, and stressful. There is a large amount of paperwork that needs to be filed out.

Dealing with mortgage lenders is often very difficult and requires a lot of patience. For this reason, we highly suggest contacting an attorney that handles loan modifications to guide you through the process.


If you have any questions, or are a homeowner facing difficulties or just have questions, you can contact us at 908-424-1011, bmiranda@bmirandalaw.com or message us on our Facebook or Instagram.

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