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Mortgage Relief During Coronavirus Financial Crisis

Mortgage Relief During Coronavirus Offers Several Options

Many Chicago area and suburban residents are wondering how they are going to pay their rent and mortgage payments after losing their income sources and suffering financial losses because of the Conoavirus outbreak. Many businesses remain shut down with no clear indication of when they can and will be able to reopen. But in the meantime, the rent and mortgage still have to be paid or many are going to face evictions and foreclosures.

Just as the Coronavirus spread quickly, the financial aid packages and options are being put together and offered to people quickly. What also comes along quickly are utility, food, gas, and grocery bills. Some people are trying to stretch limited resources and are trying to figure out whether to keep the lights on and food on the table, or make their mortgage or rent payment on time.

Homeowners with equity in their homes can use that equity to do a cash-out refinance and use the money to pay bills. This may also be a good time to refinance your mortgage and lower your monthly payments.

CBS News Offers Information on the Government Stimulus. Watch -> Stimulus Checks: Who Gets One? Who Doesn’t?

Bank of America Offers Mortgage Relief During Coronavirus Crisis

The payments will be added to the end of the loan term, but small business and consumer clients can defer their mortgage payments using a Bank of America program designed to help their customers who need mortgage relief during Coronavirus financial crises such as business shutdowns and interruptions to income for businesses forced to close their doors and send employees home.

Here is a link for Bank of America Payment Deferral Requests

Each request for mortgage loan deferments will be made on a case-by-case basis. Bank of America customers can also defer payments on things like small business loans, automobile loans, and credit card payments, for those customers who qualify for Coronavirus financial relief.

What are Governments Doing to Help with Rent and Mortgage Relief?

The city of Chicago will give residence who have suffered to pay rent and mortgage payments, $1,000 grants, on a one-time basis. Chicago Mayor Lori Lightfoot announced the COVID-19 Housing Assistance Grant on Friday, March 27th, for Chicagoans who lost their jobs or have been financially impacted by the Coronavirus pandemic. The city of Chicago Affordable Housing Opportunity Fund is the source of $2 million in payments to residents in need to keep them safe and secure.

See the City of Chicago Coronavirus website to apply for rent and mortgage relief

Fannie Mae, Freddie Mac, and the Federal Home Loan Banks are working on relief for people impacted by the Coronavirus. If you cannot pay your mortgage, loans owned by Fannie Mae or Freddie Mac may be eligible for deferments on mortgage payments. Qualifying applicants for relief will not incur late fees, have reported delinquencies or foreclosures or legal proceedings while in payment deferment.

For more FHA Coronavirus assistance information click here or contact our mortgage servicer as soon as possible.  

Options for Mortgage Relief Through Private Companies and Banks

In this article, we offer an overview of different financial relief options for Coronavirus mortgage relief, but this is not a complete list of all the options. Most major banks and commercial mortgage lenders have some sort of program available to help people defer their mortgage payments until they can afford to make on-time payments after the Coronavirus outbreak is over and people are back to work.

It makes sense for lenders to offer these options because the people who suddenly cannot make their payments are a good credit risk. If they had good jobs before they will have good jobs again. While financial recovery might take longer for some, there is light at the end of the tunnel and most of the mortgage lenders will get financial assistance of some sort for themselves.

Landlords Want to Be Paid, May Owe Their Mortgages, and May Be Lenient

While some landlords own their buildings in full, many have mortgages to pay. Talk to your landlord about financial concerns and see what they have to say. For all you know, they have a little room with making their mortgage payments because of the Coronavirus and they might be able to wait longer than usual for you to make your rent payment. Many landlords of Chicago area rental buildings want to keep good tenants who regularly pay their rents when things are normal, and right now things are not normal.

Bankruptcy May Also Give You Mortgage Relief During Coronavirus

Bankruptcy can also be an option to keep your home. If you already had mounting debts and credit cards you couldn’t pay, a Chapter 13 reorganization bankruptcy might be a good option for you, and it will allow you to keep your house and take three to five years to get caught up on your mortgage and financial obligations.

Joseph Wrobel is an experienced Chicago Bankruptcy Attorney who can help you figure out if you should take advantage of either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, to save your car, home and sanity during this unprecedented time.

Call the Chicago Bankruptcy Law Firm of Joseph Wrobel, Ltd. for Mortgage Relief During Coronavirus at (312) 781-0996

Lawsuits prompt Bank of America and JPMorgan Chase to update credit reports to eliminate consumer zombie debt

Imagine being consistently denied for employment due to negative marks on your credit report. Now, consider those same negative marks on your credit are discharged through a bankruptcy, but are still on your credit report. Some people have been compelled to pay off discharged debt because the banks have them over a barrel and refuse to update your credit report. Diane Torres is one of these victims. Ms. Torres went through bankruptcy in 2010 and received a discharge of certain debts. Two of the discharged debts, a Chase credit card and another from GE Money Bank, were still showing as delinquent accounts on her credit.

Job offers and loan approvals can require positive credit scores. Even after bankruptcy, some lenders refuse to clear reported debts from consumer credit reports.  

Ms. Torres applied for a job at a credit union. They told her they could not offer her the position unless she cleaned up the negative marks. ““I felt desperate,” she said. “It was urgent that I pay these debts or else I would not get the job that I really needed.” But after, at the suggestion of her bankruptcy lawyer, she provided the credit union with a record that she had voided the debts in bankruptcy, she got the job.”[i]

Ms. Torres is not alone, but she is lucky the credit union told her why her offer was in jeopardy. Many others simply do not receive offers after promising job interviews and they might never learn that the deciding factor was a negative credit mark; one which may have been discharged in bankruptcy.

When the bankruptcy court discharges the debt, that debt becomes uncollectable as a matter of law. The discharge does not automatically clear the credit score for someone who went through bankruptcy. In many cases, bankruptcy clients report they are being bullied into paying off credit cards with banks refusing to budge, despite the bankruptcy.

 Bank of America and JPMorgan Chase, both involved in lawsuits in federal court on this topic, agreed that they will update borrowers’ credit reports.

Zombie debt is commonly known as debt that has been discharged in a bankruptcy, written off, or otherwise no longer collectable for a variety of reasons. When these debts are bought and sold among finance companies the consumer loses. The recent announcement that these banks will put the zombies of consumer debt to rest is good news, “bills that are still alive on credit reports although legally eliminated in bankruptcy,[ii]” should be updated within the next three months.

The New York Times reported, “The lawsuits accuse the banks of engineering what amounts to a subtle but ruthless debt collection tactic, effectively holding borrowers’ credit reports hostage, refusing to fix the misstated unless people pay money for debts that they do not actually owe.[iii]

Joseph Wrobel, Ltd. can help clients with zombie debt problems and financial catastrophes, generally. Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

[i] New York Times, Bank of America and JPMorgan Chase agree to erase debts from credit reports after bankruptcies, by Jessica Silver-Greenberg, May 7, 2015.

[ii] See HNi

[iii] See HNi