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Unable to pay your mortgage? Here are some options...

Updated: Sep 28, 2020

With the high number of delinquencies on mortgages being reported due to the COVID-19 pandemic, we at Singleton Legal want to remind homeowners of their rights and the resources that are available to them.

First and foremost, the Mortgage Payment Forbearance Program allows borrowers to temporarily pause or reduce payments on federally backed mortgages. The right to request a mortgage payment forbearance expires on December 31, 2020. Under this program, you can suspend payments for up to 180 days initially and then you may request one additional extension for up to another 180 days, so you can miss payments for up to a year. While this program is only for federally backed mortgages, many servicers appear to be participating by granting initial 90-day forbearances.

The most important thing to understand about a mortgage payment forbearance is that you still owe the servicer for the missed payments! To address the missed payments, the CARES Act provides for the COVID-19 Standalone Partial Claim, which is a no interest, junior loan secured by your property. No payments are due on the Standalone Partial Claim until the payoff, maturity or acceleration of your insured mortgage, including for the sale of your Property or a refinancing, or the termination of FHA insurance on your mortgage. To be eligible for the Standalone Partial Claim, you must have been current or less than 30 days past-due on your mortgage payments as of 3/1/2020; demonstrate an ability to resume payments; and the property must be owner-occupied.

If you are not eligible for the Standalone Partial Claim, your servicer will evaluate you for other home retention options “pursuant to existing loss mitigation evaluation hierarchy.” These are the normal options that are available to delinquent homeowners such as a loan modification, attempt a repayment plan (e.g., make double-payments for a period of time until you are caught up), attempt to sell the home, or execute a deed-in-lieu of foreclosure.

If none of those options are available, you can repay your mortgage delinquency over a 5-year period through a Chapter 13 bankruptcy case. The sooner you choose to move forward with this option the easier it is because you have to catch up on all the past due payments, interest and fees over a 60-month payment plan. If you wait until the mortgage company files a foreclosure, then the delinquency will include attorney fees, which can get expensive.

Please also note that you can attempt a loan modification through a Chapter 13 bankruptcy. The benefits of this are:

1) you keep the mortgage company from moving forward with any foreclosure lawsuits while your loan modification is being processed

2) you limit or prevent the delinquency from continuing to increase while your loan application is being processed

3) you have an attorney assisting you with the loan modification application

If you have any questions or concerns about mortgage delinquencies or debt issues in general, please contact attorney Ryan Singleton at Singleton Legal, PLLC or visit our website,

This article is being provided for informational purposes only and should not be considered legal advice. If you have specific legal questions, please contact a licensed attorney in your state of residence.


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