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 many 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 that COVID-19 is causing.
Again, the federal government, as well as numerous cities, counties, states, courts, and companies, set a foreclosure moratorium for particular kinds of mortgage loans and in different locations across the United States.
Federal Foreclosure Moratorium for Federally Backed Mortgage Loans
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, which President Trump signed into law on March 27, 2020, imposed a 60-day foreclosure moratorium starting March 18, 2020 for federally backed mortgage loans. Even though this moratorium has expired, you might still be covered by a moratorium imposed by your loan investor, state or local area, or mortgage company.
Foreclosure Moratoriums for Fannie Mae, Freddie Mac, FHA, VA, and USDA Loans
The entities that regulate federally backed mortgage loans have also imposed moratoriums.
Fannie Mae and Freddie Mac loans. The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, has suspendedforeclosures and REO evictions until December 31, 2020. 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 has acquired through foreclosure or deed in lieu of foreclosure transactions. To find out if Fannie Mae or Freddie Mac owns your loan, use the Fannie Mae lookup tool and Freddie Mac loan-lookup tool. You can also ask your servicer (often your bank or lender) if Fannie Mae or Freddie Mac owns or guarantees your loan, or call 800-232-6643 (Fannie Mae) or 800-373-3343 (Freddie Mac).
FHA-insured loans. The FHA set a foreclosure and eviction moratorium through December 31, 2020, for homeowners with FHA-insured single-family mortgages. 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 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.
VA-guaranteed loans. VA has imposed a foreclosure moratorium on VA-guaranteed loans through December 31, 2020. The moratorium applies to the initiation of foreclosures and the completion of foreclosures in process. VA-guaranteed loans contain specific language in the note and mortgage that identify it as a VA loan. Also, fees paid to the VA will be shown in the closing documents.
USDA loans.USDA also set a moratorium on foreclosures and related evictions for borrowers with USDA single family housing Direct and Guaranteed loans through December 31, 2020. 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 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.
If you need help determining what entity owns or backs your loan, call your servicer. You can also send a qualified written request to your servicer asking who owns or guarantees the loan. And if your loan is in the MERS system, you might be able to find out who owns or backs your loan by calling the MERS Servicer Identification System at 888-679-6377 or visiting the MERS website. Your mortgage servicer’s identity will be listed in the MERS system if you have a MERS loan.
State Foreclosure Suspensions
Multiple states have imposed a temporary foreclosure moratorium. In various states, courts have shut 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.
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, 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.
Effective July 1, 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.
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.
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 issued a standing administrative order on March 18, 2020, to halt foreclosures and suspending residential eviction matters. The order was lifted and these matters can be heard beginning July 25, 2020.
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, Governor Andrew Cuomo's Executive Order 202.28 set a moratorium on 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 kept a limited suspension of commercial foreclosures in place until August 19, 2020, which was later extended to October 20, 2020, November 3, 2020, and then until January 1, 2021. 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. 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.
A new 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 new law is an unconstitutional violation of contract law. The suit argues that Oregon’s new 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 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, temporarily suspended sheriff’s sales and evictions due to the COVID-19 outbreak.
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. Some 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.