georgia foreclosure forbearance

Forbearance and Foreclosure Update in Georgia

 

So far, the principal policy response to the #COVID-19 pandemic in the U.S. #mortgage market has been #forbearance. On March 18, 2020, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend #foreclosures on single-family mortgages and start offering forbearance and modification plans to distressed borrowers The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, codified the Fannie Mae and Freddie Mac forbearance programs.

Mortgage forbearance means a mortgage lender allows a borrower to stop making mortgage payments for a fixed period of time. During that time, the lender does not charge late fees nor initiate foreclosure proceedings but does consider the borrower delinquent on the loan. Under normal circumstances, the lender would report the delinquency and the forbearance plan to credit bureaus. Under not-so-normal circumstances, including natural disasters, lenders often do not report loan status to credit bureaus.

The CARES Act explicitly stipulates that forbearance resulting from the COVID-19 pandemic cannot negatively affect a borrower’s credit score, so lenders cannot report borrowers in forbearance as being delinquent. Once the forbearance period expires, the borrower has to make up the missed payments. After the forbearance period ends, the borrower and lender would typically negotiate a repayment plan that makes the lender whole in the long run but does not send the borrower back into distress. Right now we are seeing most lenders offering to add the missed payments into bankruptcy repayment plans for those people already in bankruptcy.

For those consumers not in bankruptcy we are seeing most lenders either offering a loan modification and putting those amounts on the back end of the loan or adding a second loan on the property.

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Saedi Law Group are experienced Georgia bankruptcy lawyers who have been helping Georgians file bankruptcy for over 19 years. We have filed thousands of bankruptcy cases here in Georgia and are in court every day fighting for our client’s rights against creditors. If you are currently struggling with overwhelming debt, or feel your financial situation will be severely stressed in the coming weeks, now is the best time to start looking at all options available to you.

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Saedi Law Group offers a free, no obligation consultation with an experienced attorney (not a paralegal) who will review your specific situation and advise you about your options for moving forward. Our team is passionate about our work and we take it very seriously. Please contact us today at (404) 919-7296 or [email protected] to learn about what you can do to protect your future.

 

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