Top Questions and Answers About Mortgages Presented During LawChamps' May Meet-Up

Top Questions and Answers About Mortgages Presented During LawChamps' May Meet-Up

Monzerrath Ortiz
 | 

In response to the COVID-19 pandemic, LawChamps began hosting monthly virtual Legal Meet-Ups to help people get advice from real lawyers on pressing legal topics. The Meet-Ups are run in a panel format, mediated by LawChamps' Chief Legal Officer Jennifer McGlone who asks the panelists questions submitted by you, our LawChamps users.

 

The first legal meet-up was held on May 8th and was attended by around 250 people across the United States. 

 

Seven LawChamps lawyers participated as panelists.

 

Bradley Bailyn, Eafon Cobb, Lou Russo, Patricia De Fonte, Neil Opdahl-Lopez, Michael Neumann, and Bowen Klosinski discussed topics ranging from mortgage issues to unemployment.

 

Covering the topics of mortgages, debt, and bankruptcy was attorney Bowen Klosinski from Klosinski Overstreet Attorneys at Law, which operates in George and South Carolina. Mr. Klosinski offers expertise in several areas of law including Real Estate, Bankruptcy, Civil Litigation, Construction, Evictions, and Business Transactions.

 

During the COVID-19 pandemic, when the country is facing record unemployment and loss of income, much of the Meet-Up focused on mortgage issues, such as not being able to pay your mortgage and forbearance. Here are Mr. Klosinski’s answers to the top mortgage questions presented during LawChamps' May meet-up:

1. What do I do if I can’t pay my mortgage? 

If you can't pay your mortgage the first thing you need to do is call your lender and speak with them directly. Ask what kind of forbearance programs they have or what kind of assistance they can offer you. 

Forbearance programs differ depending on the lender, what your particular circumstances are and what the lender is comfortable with. 

Some forbearance programs will allow you not to pay during a particular set of time, but at the end of the forbearance period you're gonna owe all that money that wasn't paid. They'll sometimes ask for it all up front or you can create a payment plan where you're paying more than your mortgage to be able to catch up to your arrearage. 

If you get a notice of foreclosure, the way to stop that foreclosure is to file chapter 13 bankruptcy. 

Once you file, it allows you to catch up on your arrearage over 3-5 years while you make direct payments in the meantime. 

One thing to note is that this sometimes can be a little tough because when you're filing chapter 13, you need to have a regular source of income and unemployment is not necessarily considered a regular source of income. 

If you lost your job and the bank won't cooperate with you, you may need to be in touch with your real-estate broker to see if you can sell your house. It's not something you would want to do, and certainly, speaking to the bank is the first option. 

If you are considering filing chapter 13 bankruptcy, talk to the bank and then talk to a bankruptcy lawyer in your state. 

2. Does the moratorium on foreclosures end when the shelter in place orders end? What happens next? 

The moratorium on foreclosures ends on May 17th, but the moratorium only applies to mortgages that are federally-backed. (*Edit: The moratorium has been extended to June 30).

3. I closed on a house 3 weeks ago and was just laid off due to the pandemic. My first payment is due in May and it’s a government-backed loan. Should I go into forbearance? What happens if I do? 

If you can't pay you should call your lender and figure out what you can do and what forbearance program they will offer you. 

Sometimes they are offering complete suspension of payments. Sometimes they are offering forbearance agreements where you're paying them back at the end of the forbearance period; those will generally catch up with you. 

The other option would be to file a chapter 13 bankruptcy. 

I never want to recommend people to not pay their mortgage but here's what happens if you don't pay it. 

For 2-3 months they're gonna send you a notice foreclosure. In my state, in Georgia, they'll then run the advertisement in the newspaper for 2-4 consecutive weeks, and then they'll go to the courthouse steps and go to the property off on the first Tuesday of the following month. 

All that was 260 days. I'm not saying to relax on it, but you have time and it's not an emergency at the moment. 

If it gets to the point we're not comfortable with the forbearance or the lender will not offer you forbearance, then the chapter 13 bankruptcy would be what you do. 

Then, you pay back that arrearage out for the next 60 months. 

Considering hopefully you get your job back and have a steady income, you then pick up those payments directly and start paying your mortgage. 

 

 

You can access an excerpt of the transcript covering mortgages issues here.

 

The next LawChamps' Legal Meet-Up will be held via zoom on June 26th. To sign up and submit your questions, visit our website or call us at 866-653-3017.

 

This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.

 
Monzerrath Ortiz

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