Foreclosure Alternatives for Landlords
Going through foreclosure is a nightmare that nobody wants to face.
Biden-Harris Foreclosure Alternatives for Landlords
If you own rental property and are facing foreclosure because your tenants cannot pay their rent due to the COVID-19 pandemic and resulting unemployment, there are alternatives to foreclosure that will save your property.
Although many options are available only for a borrower’s primary residence, there are some programs that will modify or refinance loans on rental property (also known as investment property).
Options to Avoid Foreclosure on Rental Property
- A forbearance agreement will temporarily postpone or reduce your mortgage payments for a specific time period. The mortgage lender agrees not to begin a foreclosure during the forbearance period.
- President Biden’s foreclosure mandate also includes an extension of COVID-19 forbearance protections to June 30, 2021.
- Lenders may approve an initial 180-day COVID-19 forbearance no later than June 30, 2021. Single Family Housing Guaranteed Loan Program participants who received forbearance prior to June 30, 2020, are eligible for up to two three-month forbearance periods.
- There are no fees, interest or penalties added to the mortgage during forbearance.
Getting a Loan Modification
Your mortgage lender may agree to:
- Lower your monthly payment to a more affordable amount,
- Reduce your interest rate, or
- Extend the amortization schedule.
Other Options
As a landlord, you may qualify for a Flex Modification or a proprietary (in-house) modification.
A Flex Modification program through Fannie Mae or Freddie Mac may allow you to modify the mortgage on your investment property. The eligibility requirements for this type of modification are extensive and complicated.
Proprietary loan modifications are offered by lenders independent of governmental programs.
A Halt on Evictions Expanded by Biden-Harris
A nationwide stoppage of evictions for qualified tenants was ordered by the Center for Disease Control on September 4, 2020. The original stoppage was set to expire on December 31, 2020but was extended until January 31, 2021.
President Joe Biden extended the stoppage of evictions through March 31, 2021. On March 11, 2021, the President signed H.R. 1319, the American Rescue Plan Act of 2021 into law. The legislation provides $40 billion of rental and mortgage assistance, which includes $21.55 billion for emergency rental assistance and $5 billion for emergency housing vouchers.
Let Us Help You
Credit-Yogi works exclusively with Mortgage Audit Corporation for foreclosure and loan modification consultations and uses the same financial analysis software used by your lender. Credit-Yogi can have your exclusive foreclosure and loan modification consultation to you in five days. Call 1-866-964-9644 for a free consultation and complete mortgage audit.
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