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North Chicago real estate attorney for home refinancingThere are many reasons why a family may struggle financially, especially since the onset of the COVID-19 pandemic in 2020. If you are having difficulty making mortgage payments, and you do not expect this to change in the near future, you will likely worry about your ability to keep your home. If you default on your mortgage by missing one or more payments, your lender may begin the foreclosure process. Fortunately, you have options, including seeking a new loan to refinance your home. It is best to take action as soon as possible, because once your lender initiates foreclosure proceedings, addressing these issues will become more complicated and costly.

Options for Refinancing

Refinancing differs from other types of loan modifications. When you refinance your home, you will be obtaining a loan that will pay off the balance on your current mortgage. Since this is a completely new loan, you will be required to pay closing costs and fees, and you will need to show that you have a steady income. You will most likely also need to own some equity in your home.

Since you will need to meet a variety of requirements to qualify for a new loan, it is important to begin the refinancing process before defaulting on your current mortgage. Missed payments are reported to credit bureaus, and this will lower your credit score, which will make it less likely that a lender will approve your loan.

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Arlington heights foreclosure attorneyThe COVID-19 pandemic has caused financial difficulty for many families throughout the United States. Many businesses have been forced to close or scale back their operations, resulting in widespread job losses or reductions in work hours. Many people who are struggling to pay their regular expenses have defaulted on their mortgage payments, putting them at risk of losing their homes. Fortunately, federal and state governments have placed a moratorium on foreclosures, ensuring that families will not be forced out of their homes in addition to the other difficulties they are facing. While the current foreclosure moratorium lasts through June 30, 2021, the Consumer Financial Protection Bureau (CFPB) has proposed an extension of the moratorium through the end of the year.

Details of the CFPB’s Proposal

Based on an analysis of data by the CFPB, around three million homeowners in the United States are behind on their mortgage payments. While the foreclosure moratorium has allowed many of these homeowners to receive forbearance on mortgage payments, the CFPB estimates that this forbearance period will end for around 1.7 million homeowners in September of 2021. This could result in a massive wave of foreclosures that could cause millions of families to be displaced from their homes.

To address this issue, the CFPB has proposed an extension of the prohibition against foreclosures through December 31, 2021. This would give homeowners more time to figure out how to pay off the amounts they owe and resume ongoing payments. The CFPB is also proposing a streamlined process for allowing lenders to offer loan modifications to homeowners. This would reduce the amount of paperwork required to make these types of modifications, allowing homeowners to begin making affordable mortgage payments more quickly. The proposed rule would limit modifications to agreements that would not increase the amount of a homeowner’s monthly payments and that would not extend the term of a loan for more than 40 years after the date of modification.

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Lake County bankruptcy and foreclosure lawyerAt Newland & Newland, LLP, we regularly publish blogs that provide people with helpful information about financial issues that may affect them. Whether we are looking at how individuals or businesses can file for bankruptcy, the process of buying or selling residential real estate property, or the options for homeowners who are facing foreclosure, we want to let people know how they can address their legal concerns. We wanted to highlight some of the blogs that were most popular with our readers in 2020:

  1. What is Chapter 22 Bankruptcy? - While “Chapter 22” is not an official part of the bankruptcy code, it is an informal term that may be used to describe a situation where a company has filed for Chapter 11 bankruptcy for a second time.

  2. How Do I Get Information About an Illinois Bankruptcy Case? - We offer information about how to access public bankruptcy records.

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Waukegan foreclosure defense lawyerDebt is a major problem for many American families, especially during difficult times such as the COVID-19 pandemic. If you have lost your job, are facing large medical bills, or are struggling to make payments on the debts you owe, you may be concerned about the possibility of foreclosure on your home. Fortunately, bankruptcy may provide your family with some relief by allowing you to discharge or repay certain debts without losing your home.

Automatic Foreclosure Stay During Bankruptcy Proceedings

When you file for bankruptcy, an automatic stay will go into effect preventing creditors from attempting to collect on the debts you owe. This stay applies to mortgage lenders and foreclosure proceedings. If a bank has begun the process of foreclosing on your home, filing for bankruptcy can put a halt to these proceedings while you determine the best steps to take to regain financial security while keeping your home.

Chapter 7 or Chapter 13 Bankruptcy and Your Mortgage

A Chapter 7 bankruptcy is known as a “liquidation bankruptcy,” since all non-exempt assets you own will be sold to make payments to your creditors, and any remaining debts will be discharged. Chapter 7 bankruptcy can help you delay a foreclosure, but if you discharge the amount owed on your mortgage, in many cases the lender can still eventually foreclose on your home. However, if you do not discharge your mortgage debt, and you remain current on your mortgage payments, Chapter 7 bankruptcy may allow you to discharge other debts and give you the financial means to stay in your home.

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North Chicago foreclosure defense attorneyThe economic impact of the COVID-19 pandemic has been significant. Many people throughout the United States have either taken a pay cut, been temporarily furloughed, or lost their jobs completely. As a result, renters and homeowners are struggling to make their monthly housing payments. While repossession and foreclosure are both processes used by creditors to reclaim property that is used as collateral for a loan, the procedures followed in each type of case are different.

Defaulting on a Loan

Repossession is common in vehicle loans. Once a person becomes delinquent on payments and the borrower is in default on the loan, the lender can take back possession of the property at any time. The foreclosure process, on the other hand, is more complicated than repossession. If someone is 120 days delinquent on his or her mortgage, the lender can begin official foreclosure proceedings by filing a complaint in court. The homeowner has 30 days to respond to the complaint.

Foreclosure refers to the legal process where real estate is taken away from a borrower. Depending on state law and the circumstances of a case, a foreclosure may be judicial or nonjudicial. Illinois law outlines specific procedures that the lending institution must go through before having a foreclosure sale. 

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