With the coronavirus (COVID-19) pandemic sending thousands of homeowners into financial distress, the federal government, as well as many states, cities, local areas, and some mortgage companies, have passed laws and issued orders that impose a foreclosure moratorium for specific types of loans and in many places. This kind of moratorium, depending on the order or law, usually prohibits the initiation or continuation of foreclosures until the public health emergency due to coronavirus ends. But what should you do if your loan servicer initiates or proceeds a foreclosure anyway, while you're supposed to be protected by a moratorium?
If you were behind in your mortgage payments or already in foreclosure when the virus took off, you need to be aware of your rights.
Federal actions, some state laws, and various local orders protect homeowners from a foreclosure during this national crisis.
In most cases, federal law prevents the servicer from initiating a foreclosure until the borrower is more 120 days delinquent on the loan. Whether the federally-mandated 120-day waiting period can run concurrently with a foreclosure moratorium, however, is unclear at this point. So, you should probably assume it does.
State laws might provide you with foreclosure protections, too. See our Summary of State Foreclosure Laws to get information about how foreclosure generally works where you live, and consider talking to a local attorney to obtain information relevant to your particular circumstances.
You might find out through a mailed notice or service of legal process that a foreclosure has started or is continuing against you. You can also call the attorney or trustee that's handling the case to get specific information about what's happening in your case. You may also call your loan servicer to get the status of a foreclosure.
If your loan is subject to a moratorium—but the servicer initiates or continues the foreclosure while the moratorium is in place—you may file a complaint with your state attorney general's office. But filing a complaint with the attorney general's office won't stop the process from going forward. So, to prevent the premature loss of your home, you should also contact a foreclosure attorney to get advice about what to do in your situation. An attorney can help you enforce your rights under both federal and state law, as well as under any orders or policy changes that have happened as a result of the coronavirus national emergency.
But hiring and dealing with a foreclosure defense lawyer is different now than it was before the pandemic began, and you'll have to adjust how you communicate, share paperwork, and interact. To get tips on how to locate and work with a foreclosure lawyer while adhering to quarantine and social distancing rules during the COVID-19 outbreak, read How to Find, Hire, and Communicate With a Foreclosure Lawyer During the Coronavirus Crisis.