In response to the coronavirus (COVID-19) outbreak, the federal government and some states, localities, and companies imposed a foreclosure moratorium—a temporary halt in the initiation or continuation of foreclosure procedures—for specific kinds of loans and in certain areas. While some of these moratoriums have expired, others are ongoing.
If you're struggling to make your mortgage payments and covered by a moratorium, you might consider using this time to apply for a loss mitigation option, like a forbearance or loan modification, if you haven't already. Federal and perhaps state laws could potentially help you as you seek foreclosure relief.
Foreclosure Moratoriums for Federally Backed Mortgage Loans
Foreclosure Moratorium for FHA-Insured Loans Until June 30, 2021
The Federal Housing Administration (FHA), which is part of HUD, continued its moratorium for all new foreclosure actions and foreclosure actions currently in process for FHA-insured, single-family loans and home equity conversion mortgages (reverse mortgages). The moratorium, however, doesn't apply to vacant or abandoned properties. The moratorium also ceases evictions of persons from FHA-insured single-family properties, excluding actions to evict the occupants of legally vacant or abandoned properties.
To find out if you have an FHA-insured loan, you can look for an FHA case number on your mortgage contract. Sometimes, though, loans lose their FHA-insured status. Call your servicer (often your bank or lender) or HUD's National Servicing Center at 877-622-8525 if you have questions about your loan's status. You can also check your billing statement to see if you pay a mortgage insurance premium (MIP). MIP is what FHA calls its mortgage insurance. If you're paying MIP, then you have an FHA-insured loan.
Foreclosure Moratorium for VA-Guaranteed Loans Until June 30, 2021
The VA's foreclosure suspension applies to properties secured by VA-guaranteed mortgages, including those previously secured by VA-guaranteed loans but currently in VA's real estate owned (REO) portfolio. The moratorium stops the initiation of foreclosures, the completion of foreclosures in process, and evictions. But vacant or abandoned properties aren't covered.
To find out if you have a VA-guaranteed loan, look at the documents you signed when you took out your mortgage. VA-guaranteed loans contain specific language in the note and mortgage that identifies it as a VA loan. Also, fees paid to the VA will be shown in the closing documents.
Foreclosure Moratorium for USDA Loans Until June 30, 2021
Borrowers with mortgages directly extended by the USDA's Rural Housing Service (RHS) should be aware that they have this kind of loan. But homeowners with privately serviced RHS-guaranteed loans might not know about their loan's status. To find out if you have an RHS-guaranteed loan, ask the servicer or check your closing documents from when you took out the loan. To learn more, go to the USDA Rural Development website.
Foreclosure Moratorium for Fannie Mae and Freddie Mac Loans Until June 30, 2021
The FHFA suspendedforeclosures and REO evictions until June 30, 2021. The foreclosure moratorium applies to Fannie- and Freddie-backed, single-family mortgages. The REO eviction moratorium applies to properties that Fannie Mae or Freddie Mac have acquired through foreclosure or deed in lieu of foreclosure transactions.
To find out if Fannie Mae or Freddie Mac backs your loan, use the Fannie Mae loan lookup tool and Freddie Mac loan lookup tool. You can also ask your servicer if Fannie Mae or Freddie Mac owns or guarantees your loan, or call 800-232-6643 (Fannie Mae) or 800-373-3343 (Freddie Mac).
State Foreclosure Suspensions
Multiple states imposed a temporary foreclosure moratorium when the coronavirus pandemic began. In various states, courts shut down to halt the spread of the virus and postponed foreclosure hearings as part of the process. Unfortunately, the majority of the moratoriums have now expired.
Governor Kay Ivey of Alabama issued a proclamation granting temporary relief from residential foreclosures and evictions for the duration of the COVID-19 national emergency. Residential evictions and foreclosures have resumed as of June 1, 2020.
In Alaska, for those experiencing a financial hardship related to COVID-19,SB 241 suspends foreclosures until the date the governor determines that the novel coronavirus disease public health disaster emergency no longer exists, or until June 30, 2020, whichever is earlier. (To get the protection, you have to provide the creditor seeking foreclosure a signed statement before June 30, 2020, sworn under penalty of perjury, that you're experiencing a financial hardship related to the COVID-19 public health disaster emergency.) The Alaska Housing Finance Corporation pledged not to foreclose on homes through the end of August, after the statewide moratorium was lifted on June 30, 2020.
In Arizona, banks and mortgage servicers, in conjunction with the U.S. Department of Housing and Urban Development (HUD) and the FHFA, have agreed to suspend evictions and foreclosures for at least 60 days from March 30, 2020, with the potential to extend that period for as long as state and local emergency declarations are in place.
As of September 1, 2020, the California Judicial Council repealedrules that suspended foreclosures and related unlawful detainer actions in California's courts.
In Colorado, the Governor's Executive Order 2020-12, issued March 20, 2020, effective for 30 days, extends various foreclosure deadlines, like the deadline to file a Notice of Intent to Cure and the deadline for tendering funds to cure, under the Colorado foreclosure statutes, for 30 days. The order was extended through May 2020, and then for another 15 days, so no foreclosures should happen during that time except in cases of a public safety risk. Also, the Chief Justice of the Supreme Court of Colorado has emphasized the harms of issuing eviction and foreclosure orders absent extraordinary circumstances,
Effective July 1, 2020, filings for Delaware foreclosures and evictions may resume after being paused. But evictions will continue to be stayed (on hold) so that the Justice of the Peace Courts can determine whether the parties would benefit from a court-supervised mediation or alternative dispute resolution.
In Florida, with Executive Order 20-211, Governor Ron DeSantis extended a statewide foreclosure moratorium until 12:01 am on October 1, 2020, for single-family properties with borrowers unable to make mortgage payments due to the pandemic. The foreclosure ban applies to “final action” at the conclusion of foreclosure proceedings. So, the moratorium doesn't preclude filing or generally proceeding with a foreclosure action.
Georgia's Supreme Court extended a statewide judicial emergency until June 12, 2020, which directs state courts to prioritize essential functions, giving lower courts discretion to continue eviction and foreclosure proceedings.
Indiana Governor Eric Holcomb signed an executive order imposing a moratorium on residential foreclosures, which was extended several times, through August 14, 2020.
In Iowa, the governor's proclamation, as extended, includes a suspension of most evictions and foreclosures through May 27, 2020. Governor Reynolds extended the above-referenced orders regarding evictions and foreclosures to remain in effect until April 30, 2020. The governor has stated that she doesn't plan to extend the moratorium, but will instead establish a program to provide financial assistance to Iowans who've lost income and face foreclosure.
Kansas Governor Laura Kelly issued an executive order to ban foreclosures and evictions, which will remain in effect until September 15, 2020.
In Kentucky, Governor's Executive Order 2020-257 directs that all state, county, and local law enforcement officers cease enforcement of orders of eviction for residential premises, including after a foreclosure, for the duration of the declared State of Emergency.
In Louisiana, Governor John Bel Edwards signed a proclamation suspending deadlines in all legal proceedings until May 15, 2020, which includes foreclosure proceedings.
In Maine, pursuant to an emergency order effective March 18, 2020 to May 1, 2020, no foreclosure proceedings will be scheduled or heard.
The Maryland Department of Labor's Office of the Commissioner of Financial Regulation extended a moratorium on new residential foreclosures through June 30, 2021.
Massachusetts Governor Charlie Baker signed H. 4647 into law on April 20, 2020. This law protects homeowners from foreclosures for 120 days after the effective date of the law or 45 days after the COVID-19 emergency declaration has been lifted, whichever is sooner. The moratorium was set to expire on August 18, 2020, but Governor Baker extended the state's suspension of evictions and foreclosures for another 60 days, until October 17, 2020, through the authority granted to him by the new law. The law also requires servicers to offer forbearances of up to 180 days. The Massachusetts Emergency Rental and Mortgage Assistance Program offers up to $4,000 to eligible low-income homeowners affected by COVID-19.
Michigan Governor Gretchen Whitmer and the Department of Insurance and Financial Services announced on April 23, 2020, the "MiMortgage Partnership Program" with a list of participating financial institutions that have agreed to a voluntary plan protecting homeowners with a 60-day moratorium on foreclosures.
Minnesota law protects farmers struggling with the impacts of the COVID-19 pandemic from foreclosure until December 1, 2020, if they elect to take part in creditor mediation. Any farmer facing financial difficulties can accept the right to mediation and then receive protection from foreclosure through harvest time.
Montana Governor Steve Bullock issued a directive limiting foreclosures, stating no trustee's sale, sheriff's sale, or other involuntary sale of residential real property (or delivery of any trustee's deed, certificate of sale or sheriff's deed with respect to such sale) shall proceed through April 10, 2020, extended through May 24, 2020. Governor Bullock also issued an executive order suspending residential evictions and foreclosures for individuals who are members of a vulnerable population, who have suffered a significant financial hardship as a result of the outbreak, and who, pursuant to this direction, remain sheltered at home. The above-referenced orders shall remain in place and will expire 30 days after an individual ceases to shelter at home or at the end of the state of emergency, whichever is sooner.
In Nevada, Declaration of Emergency Directive 008 prohibits the initiation of foreclosure actions, among other things, related to residential and commercial real property until the state of emergency terminates, expires, or the directive is rescinded. Governor Steve Sisolak announced on June 25, 2020, that the state will be gradually lifting the moratorium on evictions and foreclosures.
On March 17, 2020, New Hampshire Governor Chris Sununu signed an emergency order prohibiting foreclosures in the state for the duration of the declared state of emergency. The eviction and foreclosure moratorium is scheduled to end on July 1, 2020.
New Jersey Governor Phil Murphy signed Executive Order No. 106 on March 19, 2020, which imposed a moratorium. While eviction and foreclosure proceedings may be initiated or continued during the time the Order is in effect, enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed. Sheriffs, court officers, and their agents shall refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes while the Order is in effect. The Order will remain in effect for no longer than two months following the end of the Public Health Emergency or State of Emergency, unless revoked. (Also, under an agreement with the governor, for 60 days from March 28, 2020, certain financial institutions will not start any foreclosure sales or evictions.)
In New York, on December 28, 2020, Governor Andrew Cuomo signed the “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020” (A11181/S09114) into law, which imposed a foreclosure moratorium until May 1, 2021, if the homeowner filed a hardship declaration with the proper entity. On May 3, 2021, the law was extended, and homeowners can now get a moratorium until August 31, 2021, if they file a hardship declaration with the mortgage lender or the foreclosing party (or its agent), or the foreclosing court. The law also prohibits local governments from conducting a tax foreclosure or tax lien sale in New York until August 31, 2021, if the homeowner files a COVID-19 hardship declaration with the applicable village, town, city, school district, county, or other entity or person that conducts tax foreclosures or tax lien sales.
In North Carolina, the Supreme Court ordered all civil cases postponed until after June 1, 2020, except those that can be conducted remotely.
A law in Oregon imposes a continued moratorium on judicial and nonjudicial foreclosures until the end of the "emergency period," which runs from March 8, 2020, to September 30, 2020. In response, on August 13, 2020, Oregon banks filed a lawsuit in U.S. District Court against the state government, claiming the law is an unconstitutional violation of contract law. The suit argues that Oregon's law unconstitutionally preempts federal law and unfairly seeks to establish retroactive protections beginning March 8, which is more than three months before the bill was passed. Then, on August 31, 2020, Governor Kate Brown issued Executive Order 20-37, extending the foreclosure moratorium in Oregon through December 31, 2020.
In Pennsylvania, Governor Tom Wolf signed an executive order extending a moratorium on foreclosures and evictions until July 10, 2020, and later extended the moratorium until August 31 for those who haven't received assistance from a program administered by the Pennsylvania Housing Finance Agency (PHFA) or who aren't already receiving relief through one of several federal foreclosure moratorium programs or judicial orders.
In Rhode Island, on April 24, 2020, many banks and credit unions agreed to a "Financial Institution COVID-19 Relief Pledge" that, for at least 60 days, financial institutions will not initiate foreclosure sales or evictions, consistent with applicable guidelines.
A Supreme Court order in South Carolina set a statewide moratorium on foreclosure hearings, foreclosure sales, writs of ejectment, all matters relating to foreclosures until further order by the Chief Justice. Evictions and foreclosures will resume in South Carolina beginning May 15, 2020, according to the state Supreme Court. The court stated that the enactment of the CARES Act has made it possible for some facing eviction or foreclosure to honor their financial obligations and allows others to avoid ejectment. Foreclosures now require a CARES Act certification.
Many of Texas' largest counties have suspended foreclosures for the month of April 2020 due to coronavirus concerns. Though, some bans just say that the individual county won't make county facilities available for sales to go ahead. So, it's theoretically possible that sales could happen using another channel, like Zoom or Skype.
In Vermont, a law (S. 333) establishes a moratoriumon evictions and foreclosures for the duration of the COVID-19 state of emergency and for 30 days after the termination of the state of emergency. During the emergency period, a residential mortgage lender may start a foreclosure action, but the court will stay the action until the end of the emergency period.
A Virginia law, H340, which went into effect on April 22, 2020, provides the right to get a 30-day foreclosure stay (halt in legal proceedings) to homeowners who've been affected by the coronavirus outbreak during the governor-declared state of emergency.
In Washington, D.C., a judiciary order suspends evictions of all tenants and foreclosed homeowners until May 15, 2020, and continues (postpones) hearings on foreclosures. The District of Columbia city council announced on April 8, 2020, that it passed a COVID-19 bill that includes a mandatory 90-day mortgage deferment program for residential and commercial mortgage holders who request one. On June 8, 2020, Mayor Bowser signed the Coronavirus Support Congressional Review Emergency Amendment Act of 2020. The Act prohibits residential foreclosures during the period of time for which the Mayor has declared a public health emergency and for 60 days thereafter. But the Act doesn't protect properties owned primarily for investment rather than occupancy.
Wisconsin Governor Tony Evers signed Emergency Order #15, which prohibits mortgagees from commencing foreclosures and requesting or scheduling a sheriff's sale for 60 days (ending May 26, 2020) but doesn't apply to abandoned premises.
County Foreclosure Postponements
Locally, some places, like individual counties, temporarily suspended sheriff's sales and post-foreclosure evictions due to the COVID-19 outbreak. However, foreclosure sales have resumed in many areas.
Company Foreclosure Suspensions
Some mortgage companies and banks, like Wells Fargo, Ally, and Flagstar Bank, among others, temporarily suspended residential property foreclosure sales and evictions at the beginning of the coronavirus crisis in the first quarter of 2020. Many companies have lifted their suspensions, but are still offering assistance to struggling homeowners. Call your mortgage company to find out what kind of help is available in your situation.
Also, under federal law, if you send the servicer a complete loss mitigation application before foreclosure starts, the servicer can't start the foreclosure unless and until:
it tells you that you're not eligible for any foreclosure alternatives (and any appeal has been exhausted)
you turn down all loss mitigation offers, or
you don't meet the terms of a loss mitigation agreement, like if you don't make the payments on a trial modification.
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 Laws Might Provide 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.
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.