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How Does the Latest Stimulus Relief Bill Affect Foreclosures?

Posted on in Foreclosure

McHenry County foreclosure attorneyThe COVID-19 pandemic that began last year caused not only a health crisis but an economic crisis as well. Falling behind on mortgage payments can happen, especially if one’s hours are reduced or he lost his job completely. Missing housing payments can lead to financial hardship and foreclosure.

The U.S. government extended the moratorium on foreclosures through June 30, 2021. The policy also extends the mortgage forbearance window until the end of June and provides up to six months of additional mortgage payment relief for the 2.7 million Americans who are already benefiting from it. There are additional forms of assistance that may help avoid having to go through a foreclosure on your home.

American Rescue Plan

Any reduction or loss in income can make it difficult for many people to come up with the money for essentials, such as food, utilities, and mortgage payments. It is important to note that not everyone is covered under the current forbearance policy. The program only applies to mortgages that are government-backed, which makes up approximately 70 percent of existing single-family home mortgages. Since private-market mortgages are not eligible for the new relief, there may be additional extension of the forbearance and stimulus payments.

Forbearance allows homeowners to reduce or pause their mortgage payments for a period of time, but it does not eliminate the debt entirely. Homeowners will still have to pay back what they owe after the forbearance period ends. The policy was originally created to keep Americans in their homes in an effort to prevent evictions and foreclosures, which could possibly increase the spread of coronavirus.

Contact a Kane County Foreclosure Lawyer

Financial relief from the government may help some homeowners avoid foreclosure during the COVID-19 crisis. At Thomas Law Office, we are committed to helping Illinois residents keep their homes amidst these uncertain times. Attorney Colleen Thomas has more than 16 years of experience representing clients in bankruptcy and foreclosure matters, including complex cases. Our knowledgeable and dedicated McHenry County foreclosure attorney will guide you through the latest legislation that may impact your housing situation. Call us today at 847-426-7990 to schedule a confidential consultation.