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.
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.
Federal Foreclosure Moratorium for Fannie Mae, Freddie Mac, FHA-Insured, VA, and Other Federally Backed Loans
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.
Even after this moratorium expires, you might still be covered by a moratorium imposed by your loan investor, state or local area, or mortgage company.
Additional Foreclosure Moratorium for Fannie Mae, Freddie Mac, FHA, VA, and USDA Loans
The entities that regulate federally backed mortgage loans have also imposed their own moratoriums.
On March 18, 2020, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, announced a suspension of foreclosures and evictions for a minimum of 60 days. FHFA later extended the moratorium until at least June 30, 2020, and then announced a further extension until at least August 31, 2020. The foreclosure moratorium applies to Fannie- and Freddie-backed, single-family mortgages.
VA has imposed a foreclosure moratorium on VA-guaranteed loans through August 31, 2020. The moratorium applies to the initiation of foreclosures, and to the completion of foreclosures in process.
USDA also set a foreclosure and eviction moratorium for all Single Family Housing Direct Home Loans through August 31, 2020.
State Foreclosure Suspensions
Multiple states have imposed a temporary foreclosure moratorium. 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:
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.
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.
California Governor Gavin Newsom issued Executive Order N-28-20 authorizing local governments to stop any foreclosures through May 31, 2020. Also, on March 25, 2020, JP Morgan Chase, Citi, US Bank, Wells Fargo, and a number of credit unions and state banks agreed not to initiate foreclosure sales or evictions for at least 60 days and to give homeowners who can prove they've been impacted by the COVID-19 pandemic a 90-day forbearance on mortgage payments. (Bank of America agreed to 30 days.) As part of the agreement, late payments won't be reported to credit rating agencies. The California Judicial Council approved new rules for the state’s courtrooms that include postponing judicial foreclosure proceedings and evictions until 90 days after the state of emergency related to the COVID-19 pandemic is lifted or until the Judicial Council revokes them. For a list of California local governments that have adopted coronavirus specific restrictions, go here.
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, 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,
In Connecticut, all judgments of strict foreclosure entered in matters with law days prior to July 7, 2020 are opened by the court for the sole purpose of extending the law day in those matters to July 7, 2020 for the owner of equity of redemption and thereafter for subsequent encumbrancers in the inverse order of their priorities. All foreclosure sales scheduled prior to August 22, 2020 were canceled in order to prevent a potential gathering of individuals at the auction site. On March 31, 2020, various participating financial institutions agreed not to initiate foreclosures or evictions in Connecticut for at least 60 days.
Delaware Governor John Carney issued a modification to his State of Emergency declaration, part of which prevents lenders from starting residential foreclosures until at least May 15. Foreclosures that began before the declaration won't move forward until the 31st day following the termination of the emergency declaration, at the earliest. Effective July 1, filings for foreclosures and evictions can resume but will continue to be stayed so 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 20-180, Governor Ron DeSantis extended a statewide foreclosure moratorium until 12:01 am on September 1, 2020, for homeowners 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.
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 signed Executive Order #20-28, which extends the foreclosure moratorium in that state until May 31, 2020, or the end of the state of emergency due to COVID-19, whichever is earlier.
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.
Maryland's chief judge has issued a standing administrative order to halt foreclosures and suspending residential eviction matters.
Massachusetts Governor Charlie Baker signed H. 4647 into law on April 20, 2020. This new law protects homeowners from non-essential foreclosures for 120 days after the effective date of the law or 45 days after the COVID-19 emergency declaration has been lifted. ("Non-essential" refers to foreclosures other than those which involve allegations of criminal activity or lease violations which would affect health and safety.) The governor extended the moratorium on evictions and foreclosures for 60 days, until October 17, 2020, through the authority granted to the governor by the new law.
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 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 revokes. 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, Governor Andrew Cuomo's Executive Order 202.28 set a moratorium on evictions and foreclosures for 60 days starting June 20, 2020, if nonpayment is by someone eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic. As of July 27, 2020, Administrative Order 157/20 removes a court-ordered suspension of all residential foreclosures but keeps a limited suspension of commercial foreclosures in place until August 19, 2020. Under this order, courts may resume a residential foreclosure action after scheduling at least one conference with the borrower. This kind of conference will likely be the same or similar to the required settlement conference, even if a settlement conference was previously held. During these conferences, the courts must consider all aspects of the case, including "the effects, if any, that the COVID-19 pandemic has had upon the parties." No auction or sale of property may be scheduled to take place before October 15, 2020. Governor Cuomo subsequently issued Executive Order 202.55, which extends the foreclosure and eviction moratorium as related to court filings and procedures until September 4, 2020. Also, a state law enables homeowners with non-government loans who've been affected by the coronavirus to get a year-long mortgage forbearance.
In North Carolina, the Supreme Court ordered all civil cases postponed until after June 1, 2020, except those that can be conducted remotely.
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 new 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.
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 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 new 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 new 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, are suspending sheriff’s sales and evictions indefinitely as a result of the COVID-19 outbreak.
Company Foreclosure Suspensions
Some mortgage companies and banks, like Wells Fargo, Ally, and Flagstar Bank, among many others, are suspending residential property foreclosure sales and evictions.
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.