These are difficult financial times. You are not alone: so many of us have been hit hard by the coronavirus (COVID-19) pandemic. These are unprecedented times where unemployment rates are staggeringly high. If you need debt relief from a mortgage, you have options. Here are some resources you can use if you are struggling to pay your mortgage and need help.

Often, the first thing to do is to ask for help directly from the lender that gave you the loan. You write a formal letter, called a loan restructuring request letter, and request a modification to the terms of your mortgage. This letter is the place where you can express your financial troubles in more personal terms, and it gives you the chance to request and receive better terms (like a temporary deferment period when you would not make payments, a lower interest rate, lower payments, or a longer repayment period). Often, if your credit is good, you can refinance your mortgage and take advantage of reduced interest rates.

It is important to reach out to the lender directly when you are facing hardship because your credit can be negatively impacted by late payments and you can face foreclosure activities if you fall too far behind and do not have a restructuring and refinancing agreement in place. 

​The main reasons people need to refinance their homes or restructure their mortgages are job loss or reduced income due to the coronavirus (COVID-19) pandemic. If the reason you need assistance is because of financial difficulties related to the coronavirus (COVID-19) pandemic, it is important to say that, because there are loan relief programs directed at helping those impacted by this crisis. You do not need to get overly personal, just simply explain how your circumstances have changed in general terms, and ask the lender directly for the relief you want. ​

​Most lenders are interested in working with you, and, if you have a loan through the federal government, there are standardized loan deferment, forgiveness, restructuring, and refinancing programs available. You can automatically refinance according to set criteria if your mortgage was made through the federal government or your loan was federally-backed or guaranteed, provided you apply. 

Still, any lender will need to know they will be paid if they come to new terms with you. That is why when writing your letter, you should explain that due to your changed financial situation, you need help but are not trying to avoid paying the debt.

It’s also important to be clear with your lender about what relief you want. Rather than ask them what coronavirus (COVID-19) related relief programs of loan modification options might be available, state directly what you want your monthly mortgage payment to be reduced to, what interest rate you want if you are asking for a lowered rate, or, if you want to defer payments for a certain number of months, tell them when you expect you will be able to resume payments. 

The main thing for you to know is that you have rights. You have the right to request relief and the right not to be harassed about repayment.

Sometimes you need more help than simply writing a letter to request a mortgage refinancing or deferment will give you. There might be more opportunities to apply for loan forgiveness or to apply for a program that discharges or reduces your payments based on your income or the type of job you hold than you know about or know how to apply for. You might need someone to make a plan and negotiate on your behalf, especially if foreclosure proceedings have been initiated. Also, sometimes it’s helpful to talk to a professional about the long-term implications on your credit and finances from taking a deferment or getting a loan forbearance. If you find yourself in that situation, LawChamps can help.

We have experienced lawyers nationwide who can help you with your personal financial situation; they can talk with you to better understand your situation and make a plan for you and your family. There are many ways for you to get out of debt, secure a brighter financial future, and peace of mind.