Will the foreclosure moratorium reduce the principal balance on my mortgage in Ohio?
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The foreclosure moratorium in Ohio, which was implemented in response to the COVID-19 pandemic, has had a significant impact on the foreclosure process. The moratorium, which was put in place on March 20, 2020, has been extended multiple times and is currently set to expire on January 31, 2021.
One question that many homeowners in Ohio may have is whether the foreclosure moratorium will reduce the principal balance on their mortgage. The answer is, it depends on the individual circumstances of the homeowner.
The foreclosure moratorium does not directly reduce the principal balance on a mortgage. It simply prohibits lenders and servicers from initiating or completing a foreclosure on a residential property. This includes issuing a notice of default, filing a complaint, or scheduling a sheriff's sale. The moratorium also applies to mortgage servicers and lenders who are seeking to foreclose on a property that is secured by a reverse mortgage.
If a homeowner is struggling to make their mortgage payments due to financial hardship caused by the pandemic, there may be options available to reduce the principal balance on their mortgage. For example, homeowners may be able to permanently change the terms of their mortgage through a loan modification. A loan modification involves changing the terms of a mortgage to make the payments more affordable for the homeowner. This may include extending the loan term, reducing the interest rate, or changing the type of loan.
Additionally, homeowners may be able to negotiate a principal reduction with their lender. A principal reduction involves permanently reducing the amount of money that a homeowner owes on their mortgage. This can lower the monthly mortgage payment and make it more affordable for the homeowner. However, it is important to note that a principal reduction is not always an option, and lenders are not required to agree to a principal reduction.
If you are a homeowner in Ohio who is struggling to make your mortgage payments, it is important to understand your options. A qualified attorney can provide you with legal advice and representation to help you navigate the foreclosure process.
If you are concerned about losing your home to foreclosure, we encourage you to call the law firm of Doucet Co., LPA at (888) 200-9824. Our team of experienced attorneys can help you understand your options and protect your rights.