Foreclosure Moratorium Extension 2024

Find out if a moratorium on foreclosures is likely in 2024.

By , Attorney (University of Denver Sturm College of Law)

Early in the COVID-19 pandemic, the federal government, most states, some localities, and many mortgage lenders put foreclosure moratoriums into effect. But now, the federal foreclosure suspension and state foreclosure moratoriums have expired.

Still, in a few circumstances, depending on your loan type, you might be eligible for a pause in foreclosure proceedings. For example, the U.S. Department of Veterans Affairs (VA) paused foreclosures for six months, through May 31, 2024, for veterans with VA loans. If you have a Fannie Mae or Freddie Mac loan and your mortgage servicer learns that you've applied to your state's Homeowner Assistance Fund program, the servicer must suspend any foreclosure activity for up to 60 days.

Also, other kinds of mortgage help are available to help you stop a foreclosure—like getting a loan modification or participating in foreclosure mediation—even if you don't get a foreclosure moratorium.

What Is a Foreclosure Moratorium?

A "foreclosure moratorium" is a temporary stop in initiating or continuing foreclosures.

Did the COVID-19 Foreclosure Moratorium End?

When the coronavirus outbreak happened, the federal government and most states put a hold on foreclosures. But, again, widespread foreclosure suspensions have mostly ended.

Federal COVID-19 Foreclosure Moratorium Ended on July 31, 2021

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act initially imposed a foreclosure moratorium for federally backed mortgage loans starting March 18, 2020.

"Federally backed mortgage loans" include:

  • loans the Federal Housing Administration (FHA) insures
  • mortgages the VA guarantees
  • U.S. Department of Agriculture (USDA) loans, and
  • Fannie Mae and Freddie Mac loans.

This moratorium was extended many times during the COVID-19 pandemic but finally expired on July 31, 2021.

State COVID-19 Foreclosure Moratoriums Have Also Expired

With very few exceptions, most state-imposed foreclosure moratoriums, which also covered other kinds of loans, have also ended.

To determine if a foreclosure moratorium still applies to your area or loan type, check online, talk with a local lawyer, speak with a HUD-approved housing counselor, or contact your loan servicer.

For specific information about what's going on in your foreclosure, contact the attorney or trustee handling the foreclosure. You can also call your loan servicer for information.

Will a Foreclosure Moratorium Happen in 2024?

The federal government hasn't given any indication that it will enact a foreclosure moratorium extension in 2024 for federally backed mortgage loans due to the ongoing COVID-19 issue.

Likewise, the U.S. Department of Housing and Urban Development (HUD) (which oversees the FHA) and USDA haven't announced any plans to set another moratorium for foreclosures. And only a couple of states extended their foreclosure moratoriums beyond the summer of 2021.

But the VA set another foreclosure moratorium.

Foreclosure Moratorium for VA Loans Through May 31, 2024

The VA halted foreclosures through May 31, 2024, for veterans with VA loans. The VA is working on developing a program to help borrowers avoid foreclosure after a COVID forbearance.

Under the new VA Servicing Purchase (VASP) program, the VA will buy defaulted VA loans from other companies, modify them, and add them to a VA loan portfolio.

If you have a Fannie Mae or Freddie Mac loan and your mortgage servicer learns that you've applied to your state's Homeowner Assistance Fund program, the servicer must suspend any foreclosure activity for up to 60 days.

To find out if Fannie Mae or Freddie Mac owns your mortgage loan, use Fannie's mortgage loan lookup tool and Freddie Mac's loan lookup tool. You can also contact your servicer to ask if Fannie Mae or Freddie Mac owns your loan, or call 800-232-6643 (Fannie Mae) or 800-373-3343 (Freddie Mac).

What Is the Homeowner Assistance Fund?

On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021 into law. This Act created a Homeowners Assistance Fund, a mortgage-relief program, to provide $10 billion to the states to help struggling homeowners. The states, plus the District of Columbia, set up various programs with their allocated funding to distribute the money and assist financially-distressed homeowners.

These state-run programs help homeowners pay overdue and future mortgage payments and other housing costs, like past-due utility costs, property taxes, homeowners' association fees, and more. While many of these programs have used all of their allocated money, some programs are still open.

CFPB Cautions Servicers Not to Foreclose When Homeowner Seeks Homeowner Assistance Fund Assistance

Even if you don't have a Fannie Mae or Freddie Mac loan or live somewhere that doesn't provide a foreclosure suspension if you apply to a Homeowner Assistance Fund program, the Consumer Financial Protection Bureau (CFPB) published a statement addressing this issue. It advised servicers to ensure mortgage borrowers aren't improperly referred to foreclosure while seeking help from a Homeowner Assistance Fund program.

The CFPB, which oversees certain lenders, also emphasized that foreclosing on a borrower while a Homeowner Assistance Fund application is pending "will merit increased scrutiny."

Foreclosure Numbers Are Going Up

Most COVID-related borrower protections expired in 2021. In addition to the federal foreclosure moratorium ending, a CFPB rule that made it mandatory for loan servicers to do more to help homeowners affected by COVID-19 expired on December 31, 2021. So, while most foreclosures stopped in 2021, foreclosure numbers rose after the moratorium and rule expired.

Foreclosure activity in the United States in 2022 and 2023 continued to increase, nearing pre-pandemic levels. Foreclosure rates will probably continue to climb in 2024. A couple of reasons for increasing foreclosure rates are rising inflation, recession fears, and the end of COVID-era forbearances.

Ways to Avoid Foreclosure

Mortgage help is available, even though a sweeping foreclosure moratorium extension isn't likely. If you're behind in mortgage payments, you might qualify for an alternative that will allow you to save your home. Or you might be eligible for an option where you give up the property without going through a foreclosure.

Various Other Loss Mitigation Options Might Be Available

After you submit a loss mitigation application to your loan servicer, you might receive another kind of offer allowing you to stay in your home, like a repayment plan, loan modification, or payment deferral.

Alternatively, if you can come up with the funds, you could redeem your home before or, depending on state law, after the foreclosure, or complete a loan reinstatement.

Or, if you'd like to leave the property without going through a foreclosure, you might be able to complete a short sale or deed in lieu of foreclosure.

Use Federal Protections Against Foreclosure to Your Advantage

Federal law usually prevents the servicer from starting a foreclosure until you're more than 120 days delinquent on the loan. You can use this time to work out a way to avoid foreclosure.

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 for 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.

But the servicer generally doesn't have to review more than one loss mitigation application from you unless you bring the loan current after applying.

Use State Protections Against Foreclosure to Your Advantage

State foreclosure laws require servicers to complete specific steps to foreclose. Your state's laws, along with the federal and contractual rights you get in a foreclosure, might provide you with significant foreclosure protections.

Participate in Foreclosure Mediation

You might be able to delay a foreclosure or work out a way to avoid it by going to foreclosure mediation, if available.

Challenge the Foreclosure in Court

Depending on the circumstances, you might consider initiating a lawsuit to stop a nonjudicial foreclosure or challenging a judicial foreclosure in court.

Consider Filing for Bankruptcy

You can stop a foreclosure in its tracks by filing for bankruptcy—even at the last minute. After filing a bankruptcy petition, an "automatic stay" immediately goes into effect. The stay acts as an injunction prohibiting the bank from foreclosing on your home or otherwise trying to collect its debt. So, any foreclosure activity must stop.

Filing for Chapter 7 bankruptcy will probably just delay a foreclosure, while you might be able to stop a foreclosure with a Chapter 13 bankruptcy. Talk to a bankruptcy attorney to learn if bankruptcy makes sense for you.

Getting More Foreclosure Help

To learn more about your legal rights in a foreclosure, consider talking to a foreclosure attorney. A lawyer can advise you about foreclosure alternatives, your rights in a foreclosure under federal law, tell you about any state laws that protect you in the process, and help you fight a foreclosure, if you choose to do so.

If you need more information about loss mitigation options, a HUD-approved housing counselor can explain the alternatives to you in more detail and help you deal with your mortgage servicer. Go to hud.gov to find a housing counseling agency near you, or call toll-free 800-569-4287.

If your loan is owned or insured by Fannie Mae, Freddie Mac, FHA, VA, or the USDA's Rural Housing Service, you can contact that entity to find out about foreclosure relief.

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