Mortgage Loan Modifications Post-CARES Act

April 21, 2020
Our colleagues discuss mortgage loan forbearance activity in light of COVID-19 and suggest some approaches to prepare and execute on the potential flood of loan modifications to come.

The COVID-19 pandemic is impacting our economy in many ways that no one would have anticipated just a few months ago. The country’s response to this crisis is touching virtually every segment of our economy and transforming how we, as a society, conduct business. The mortgage lending industry is no exception.

Faced with the prospect of rising unemployment caused by social distancing protocols and related “Stay-at-Home” orders, the U.S. Congress understood that this unanticipated change in financial circumstances would have a materially adverse impact on many American families and their ability to meet their monthly household obligations including their monthly mortgage payment. As part of the CARES Act, Congress sought to mitigate this particular aspect of the broader negative economic impacts by affording borrowers the ability to seek temporary forbearance of their mortgage payments.

The resulting loan forbearance activity has been a boon for affected borrowers, but has created many unanticipated questions for lenders and servicers. But while the forbearance rush came upon the industry with minimal time to prepare, mortgage lenders and servicers can plan ahead for the high volume of loan modifications that will be required at the conclusion of the forbearance period.

To learn more about what lenders and servicers can do to prepare - read the full article published by Sandler Law Group here.

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In this blog post concerning legal and regulatory matters of interest to the mortgage industry, Sandler Law Group (SLG) provides general information and industry observations that are not motivated by or concerned with a particular past occurrence or event, or a specific existing legal problem of which SLG is aware. Nothing published herein is intended to constitute legal advice and the use of the blog post by a reader shall not give rise to an attorney-client relationship with SLG. SLG expressly disclaims any representation of accuracy or reliability as to the content of this blog post, as well as any obligation to maintain such content over time or to ensure it is free from errors. Brad Cope is the attorney responsible for the SLG content of this blog post. Unless otherwise noted, the attorneys of SLG are not certified by the Texas Board of Legal Specialization.

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