In response to the coronavirus (COVID-19) outbreak, the federal government and some states, localities, and companies have imposed a foreclosure moratorium—a temporary halt in the initiation or continuation of foreclosure procedures—for specific kinds of loans and in a number of areas.
You might consider using this time to apply for a loss mitigation option, like a loan modification, if you haven't already. Federal and perhaps state laws could potentially help you as you seek foreclosure relief. And, even if you've already asked for an alternative to foreclosure, you might want to make another request considering the emergency situation that COVID-19 is causing.
(If you're current on payments, or recently fell behind, and need mortgage-payment relief due to coronavirus, read How to Get Mortgage Payment Relief During the Coronavirus Outbreak.)
Again, the federal government, as well as numerous cities, counties, states, courts, and companies, are imposing a foreclosure moratorium for particular kinds of mortgage loans and in different locations across the United States.
The federal stimulus plan—the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” (H.R. 748)—which President Trump signed into law on March 27, 2020, imposes a 60-day foreclosure moratorium starting March 18, 2020, for federally backed mortgage loans.
A federally backed mortgage loan is one that is:
Under this Act, a servicer of a federally backed mortgage loan that's secured by a first or subordinate lien on residential real property, including individual units of condominiums and cooperatives, designed principally for the occupancy of from one to four families, may not initiate any judicial or nonjudicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.
This moratorium covers the majority of residential mortgage loans in the country. Vacant and abandoned properties aren't included, though.
If you loan isn't federally backed, then you aren't covered by the CARES Act. You might, however, be covered by a moratorium imposed by your state or local area, or mortgage company.
Multiple states have imposed a temporary foreclosure moratorium. For example:
New foreclosure suspensions are announced almost daily. Due to the rapidly-changing nature of the current situation, this list isn't complete. For general information on foreclosure suspensions and court closures in your area or for your loan type, check online or contact your loan servicer.
Courts, too, in various states, are shutting down to halt the spread of the virus and are postponing foreclosure hearings as part of the process. For example:
Again, due to the evolving national emergency, this list is not complete. Check with your local court to find out if a moratorium has been established in your area.
Locally, some places, like individual counties, are suspending sheriff’s sales and evictions indefinitely as a result of the COVID-19 outbreak.
Some mortgage companies, like Wells Fargo, are suspending residential property foreclosure sales and evictions.
To get specific information about what’s happening in your foreclosure and whether it is subject to a moratorium, call the attorney or trustee that’s handling the case. You can also call the servicer. To learn whether a court hearing will take place, you may contact the court as well. Though, you should probably expect longer than usual wait times before you can get answers to your questions.
Considering a foreclosure moratorium won’t delay the process forever, consider applying for a more permanent loss mitigation option, like a loan modification, if you expect your financial hardship to last indefinitely.
If you send the servicer a complete loss mitigation application before foreclosure starts, the servicer can’t start the foreclosure unless and until:
If you’re already in foreclosure and you send the servicer a complete application after foreclosure starts—but more than 37 days before a foreclosure sale—the servicer can’t ask a court for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until one of the three conditions mentioned above has been satisfied.
Under federal law, the servicer generally doesn't have to review more than one loss mitigation application from you unless you bring the loan current after applying. But considering what’s happening with the pandemic, even if you already applied, it's worth contacting the servicer again to find out if additional help has become available. If your loan is owned or insured by Fannie Mae, Freddie Mac, FHA, VA, or the Rural Housing Service, you can contact that entity too to find out about foreclosure relief.
State foreclosure laws require the servicer to complete specific steps to foreclose. In addition, state law—along with the federal and contractual rights you get in a foreclosure—might provide you with more foreclosure protections.
A local foreclosure lawyer can advise you about your legal rights under federal law and tell you about any state laws that could protect you in a foreclosure. A HUD-approved housing counselor can provide you with helpful information (at no cost) about ways to avoid a foreclosure.
To get information about handling your other debts during the epidemic, see Coronavirus: Dealing With Debt. To find out about different kinds of potential relief if you can’t make payments on a personal loan, small business loan, or credit card debt, read Dealing With Loans and Credit Card Debt You Can't Pay After COVID-19.
Also, while this article addresses mortgage foreclosures, if you're behind in paying your property taxes, certain counties are declaring a moratorium on property tax foreclosures and tax sales. Call your county treasurer’s office or tax collector's office, or look online, to see if your area has a moratorium.