It seems like just weeks ago we saw bright light at the end of the COVID-19 tunnel. Turns out that thanks to people who refuse to be vaccinated and the resultant spread of the highly contagious Delta variant of the Coronavirus that light may once again be an oncoming train that puts both lives and the nation’s economic recovery at risk. To eliminate that risk, we encourage everyone who has not already been vaccinated to roll up their sleeves and get their shot ASAP.
Unfortunately, the economic slowdown, more than 400,000 people a week are now filing new jobless claims, combined with Ohio Mike DeWine and other governors’ decision to rescind federally funded unemployment benefits leave millions of people at risk for losing their homes via eviction or foreclosure.
With that in mind, this update includes vital information about evictions, forbearance, and foreclosure…
First, a few updates on what we’ve been up to:
DannLaw Leads the Fight to Restore $1 Billion in Federal Benefits that Governor Dewine turned down for Unemployed Ohioans
You may have read about our effort to have the supplemental unemployment benefits restored to over 330,000 Ohioans. We argued in court that Governor Dewine lacked the legal authority to refuse benefits made available to unemployed Ohioans by the Federal Government. While we lost the first round in Franklin County Court we are urging that the 10th District Court of Appeals to reverse the trial Judge’s decision. We are optimistic that our legal arguments on behalf of over 330,000 Ohioans will prevail. This is important not only to unemployed people but also to all of us. Those benefits will (and would have) pumped over $100 Million a week into Ohio’s economy. That money would be spent to support small businesses and employed workers throughout the state.
Ryder v. Wells Fargo Class Action Settles for $12 million: DannLaw Leads the Way
DannLaw and its co-counsel recently helped their clients resolve a class-action lawsuit against Wells Fargo related to glitches in the bank’s loan modification program: Ryder v. Wells Fargo Bank N.A., No. 1:19-cv-00638-TSB (S.D. Ohio). Through the settlement, roughly 1,830 class members will receive over $ 9 million in direct cash payments. No claim forms are required–checks will be issued directly to the class members. The rest of the settlement amount will be used to pay settlement administration fees and expenses, attorneys’ fees and expenses, and class representatives’ incentive awards. A copy of the settlement agreement may be found here and Plaintiffs’ Unopposed Motion for Preliminary Approval, filed on July 2, 2021, may be viewed here.
Foreclosure Moratorium Ends
The federal government’s foreclosure moratorium ended on July 31, 2021. Under new rules issued by the Consumer Financial Protection Bureau, foreclosure actions may proceed if the borrower:
While foreclosure proceedings may begin, foreclosure is not necessarily a done deal. DannLaw’s experienced foreclosure defense attorneys have helped hundreds of families save their homes and their financial futures. We know how to use the law to protect borrowers and to hold lenders who violate the rules accountable.
If you were in foreclosure when the moratorium went into effect last year or believe your servicer or lender is about to begin proceedings to take your home, do not delay, contact DannLaw today to arrange a no-cost, no-obligation foreclosure defense consultation.
If you even suspect that a foreclosure will be initiated or reinstated Do not delay, contact us TODAY! Click here to schedule an in-person, video conference, or telephone appointment or call us at 216-373-0539.
In Forbearance? Now is the time to begin planning your exit strategy…
There is also good news for homeowners in forbearance. The CFPB recently issued new rules designed to protect homeowners as mortgage forbearance programs and the moratorium on foreclosures end. The CFPB said the regulations, which take effect August 31, 2021, will give borrowers who stopped making their mortgage payments time to explore their options and require servicers to “redouble their efforts to work to prevent avoidable foreclosures.”
Among other things, the new rules will:
Along with issuing the new rules, the federal government is also:
Now is the time to begin planning your forbearance exit strategy.
Remember: forbearance is not forgiveness. At some point, borrowers will be responsible for missed payments, taxes, and other fees. The phase-out of the forbearance program and end of the foreclosure moratorium means now is the time for borrowers to plan and execute an exit strategy.
Fortunately, the CFPB’s new rules provide a clear roadmap to the future for many homeowners. Let’s take a look at the options available based on the type of loan you have. As always, the experienced legal team at DannLaw is available to help assess your situation and select the path that is right for you and your family. To arrange a no-cost, no-obligation consultation please complete and submit our contact form. We are eager to help you.
Generally speaking, borrowers whose loans are backed by the federal government have four ways to repay balances that accumulated during forbearance:
This option might be right for you if…
You can afford to pay more than your regular mortgage payment for a few months.
How it works
A portion of the amount you owe will be added to the amount you pay each month.
This option might be right for you if…
You can resume your regular payments but can’t afford to increase your payments.
How it works
These options will either move your missed payments to the end of your loan or put them into a subordinate lien repayable only when you refinance, sell, or terminate your mortgage.
This option might be right for you if…
You can no longer afford to make your regular mortgage payment.
How it works
Your payment can be reduced to an affordable amount and your missed payments will be added to the amount you owe. Your monthly payments could also be lower, but it could take longer to pay off your loan.
This option might be right for you if…
You want to pay back all of your missed payments at once.
How it works
For most loans, servicers cannot require you to pay a lump sum. So, if you only hear about a lump-sum repayment, ask about other options.
Now let’s look at the options available by the type of loan:
Fannie Mae and Freddie Mac do not require a lump sum payment at the end of forbearance and offer repayment plans, deferrals and partial claims, and loan modifications. Your servicer should reach out to you about 30 days before your forbearance plan ends to determine which program is best for you.
HUD/FHA does not require lump sum repayment at the end of the forbearance. Servicers will determine if the borrower is eligible for FHA’s COVID-19 Recovery Standalone Partial Claim home retention option no later than at the end of the forbearance period. This program is for homeowners able to resume making their monthly mortgage payments and places arrearages into a subordinate lien that is repaid only when the home is refinanced, sold, or the mortgage is terminated. This lien does not accrue interest.
Borrowers who cannot resume making existing monthly mortgage payments may be eligible for the COVID-19 Recovery Modification which extends the term of the mortgage to 360 months at a fixed rate and targets reducing the monthly principal and interest portion of monthly mortgage payments.
USDA does not require a lump sum payment at the end of the forbearance. Borrowers able to resume making regular payments should be offered an affordable repayment plan or term extension that defers arrearages to the end of the loan. Servicers should determine if borrowers unable to begin making regular payments qualify for other loss mitigation options.
Servicers of VA loans cannot require borrowers to make a lump sum payment at the end of forbearance. VA currently offers repayment plans and loan modifications and is now evaluating other options that may be made available in the future.
Homeowners whose mortgages are held by private lenders are especially at risk at the end of forbearance. If you are in forbearance, please stay in regular contact with your servicer because they have the ability to change the terms of your plan at any time. They can also require you to make a lump sum payment when forbearance ends. In addition, it is highly likely that any repayment options they offer will be designed to maximize their profit at your expense.
DannLaw’s experienced legal team knows how to deal with and hold private lenders accountable. If you have a private mortgage, don’t hesitate to contact us to arrange a free consultation so we can assess your situation and help ensure that your home and your finances don’t become victims of the pandemic.
For comprehensive information about forbearance, repayment options, and other COVID-19-related mortgage issues please visit the CFPB’s Help for Homeowners webpage.
For Renters
The good news: on Tuesday, August 3, the Centers for Disease Control and Prevention (CDC) extended the eviction moratorium that had expired on July 31 until October 3, 2021. The eviction ban is in effect for areas of the nation experiencing “substantial and high levels of community transmission” of the coronavirus. That means 90% of the nearly 11 million people behind in their rent are protected.
According to the Biden administration, the extension will give renters and landlords time to access the more than $46 billion in aid that has been approved by Congress. To date only $3 billion has been disbursed. That means lots of dollars are available to pay for rent, late fees, utilities, and moving costs. You can learn more about the assistance programs here.
If you are behind in your rent payments, we strongly urge you to take the following steps:
Eligibility is also determined by household income based on where you live. For detailed information about eligibility click here then select your state, territory, or tribe from the pulldown menu.
Thanks for taking the time to read this important update, and as always feel free to contact us should you have questions or need our help. https://calendly.com/mdann
