Moratorium on Mortgage Payments: Then What?

As federal banks are mandated to allow for a moratorium of mortgage payments and private banks offer or decline individual moratorium requests based on cause, what is going to happen when these mortgage payments are due? The answer is unclear for government-mandated moratoriums and even less clear for moratorium requests granted by private banks.

All homeowners obviously need to know when they are going to be required to make up payments that they have been unable to make during the COVID-19 pandemic. Many homeowners and foreclosure defense lawyers do not see a clear and consistent directive to how these unpaid monthly obligations are going to be reorganized and incorporated to avoid a new wave of foreclosures. Having witnessed the disaster of the 2008 mortgage meltdown and bank bailouts, housebound homeowners both employed and unemployed wonder if they will be the next victim of a half-baked plan to assist homeowners that is, at best, uncoordinated and likely to lead to continued confusion with borrowers begging banks for merciful repayment terms. Good luck with that.

Not dissimilar to the national pandemic, homeowners do not feel there is clear guidance and are worried about their families’ homes. While there are no guarantees, there are suggestions.

  1. Do not accept the moratorium unless you absolutely need it. Stay safe and stay out of the morass.
  2. Any promise from a bank to a homeowner has been proven by the 2008 meltdown to be unenforceable against the bank.
  3. Banks have proven by the past economic meltdown to be often unconcerned and almost always unreliable. American homeowners have no true client relations with their banks. (Do you know who your banker is?)
  4. Document everything. Get names, get emails, send letters. Paper your file. In America, if it is not in writing, it does not exist.
  5. Save, save, save. Any portion of any amount you cannot pay and you can save can be the greatest means to save your home when payments recommence.
  6. Keep an eye on everything you receive. What does the statement look like? What is the promise from your bank? Finances go down like a stone when you are out of work. When you return, will your recovery meet with your bank’s requirements and prevent it from heading towards foreclosure?

If you are struggling to make mortgage payments, contact the Law Offices of Neil Crane, LLC and find long-lasting solutions. We offer a free initial consultation. Please do not hesitate to call us today at 203-230-2233, or complete our online contact form to discuss your questions and concerns with an experienced bankruptcy attorney.