The COVID-19 pandemic has ushered in a new period of uncertainty – and as businesses continue to close down across the country, this uncertainty has begun to impact homeowners in more direct ways. In a sign of deepening economic trouble, mortgage servicers are reporting that they’ve received almost 2000% more requests for mortgage forbearance in April, even though most payments will not be due until the 15th.
Because the recently-passed Coronavirus Aid, Relief, and Economic Security or CARES Act includes mortgage relief measures, government-backed mortgage servicers are now legally required to allow borrowers to delay payments for at least 90 days, although the payments will likely be remitted or modified after that point. According to CNBC, mortgage forbearance requests grew by over 1200% in the first two weeks of March alone, rising again to 1800% in the final two weeks of the month.
It has also become difficult for homeowners to even reach a live person at their servicer in order to place a forbearance request. Already, mortgage servicers are experiencing average call wait times of up to 17 minutes, as compared with just a few minutes on average back in March.
What Solutions Do Homeowners Have?
While the CARES mortgage forbearance program could assist many homeowners in the short term, this may not be the ideal solution for families already struggling with debt. Additionally, many people may not even be able to reach a mortgage servicer in time to join the forbearance program for April. This could leave thousands of Utah families without a clear solution to their debt – and in danger of losing their home.
Of course, there are many other debt management solutions out there, including Chapter 13 bankruptcy. In Chapter 13, debt is reorganized into a more manageable payment plan, and home mortgage holders can file for bankruptcy protection. This allows them to pay their mortgage arrearages over 3 to 5 years and catch up on their debt.
If you’re worried about losing your home due to a coronavirus-related job loss, rising healthcare costs, or other financial burdens, it’s important to speak with a qualified bankruptcy lawyer as soon as possible. At Pearson Butler, our compassionate and caring attorneys will listen to your story and help you explore all the options for debt relief during this difficult time.
Contact us at (800) 265-2314 today to see how we may be able to help with your mortgage payments.