Can Lenders Foreclose During COVID-19?

Can Lenders Foreclose During COVID-19As the coronavirus pandemic presses on, the unemployment rate continues to steadily increase, and experts are saying that it could soon approach what was seen during the Great Depression. With no income to rely on, many people are having a hard time paying their mortgages and fear the possibility of foreclosure. Homeowners are understandably stressed, and many are also confused because there are so many conflicting reports swirling around about whether lenders can foreclose during COVID-19.

Unfortunately, the answer to that question depends on a number of factors, including whether your mortgage loan has federal backing and whether your state has enacted any sort of relief. An experienced foreclosure defense attorney can provide you with advice tailored to your specific situation.

Federal Government Mortgage Relief

At the end of March, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. One of the main provisions in this legislation implements foreclosure relief for homeowners with federally backed loans (those purchased, securitized, owned, insured, or guaranteed by Fannie Mae or Freddie Mac, as well as those owned, insured, or guaranteed by FHA, VA, or USDA).

If your mortgage qualifies for protection under the CARES Act, your loan servicer cannot initiate any foreclosure process (whether judicial or non-judicial), move for a foreclosure judgment, order a sale, or execute a foreclosure-related eviction or foreclosure sale until mid-May. You can also request additional forbearance if you experience financial hardship as a result of the pandemic.

State Government Mortgage Relief

Each state government has also taken steps to protect homeowners who have been financially impacted by the COVID-19 crisis. In Florida, for example, the governor issued an executive order suspending foreclosures until mid-May.

It’s important to note that loan forbearance is not the same thing as loan forgiveness—forbearance involves deferring the payments, while forgiveness involves cancelling them completely. Even if homeowners are excused from making mortgage payments during the pandemic, they may still be responsible for making up those payments at a later date. Some lenders are requiring homeowners to make up any missed payments as soon as the forbearance period ends, while others are tacking the missed payments onto the end of the term, essentially extending how long it will take to pay back the loan.

The Foreclosure Defense Attorneys to Choose in Tampa Bay

As noted above, foreclosure relief during the COVID-19 pandemic will largely depend on the specific terms of your mortgage loan. So, if you’re struggling to make your mortgage payments, it would be a good idea to sit down with a qualified foreclosure defense attorney and review the options available to you to stop a potential foreclosure.

Fortunately, if you’re in Pasco County or Hernando County, you can look to the professionals at The Lyons Law Group, P.A., a full-service real estate law firm that’s been in operation since 2008. We offer free initial consultations and we’d be more than happy to talk with you for free, or meet with you at either of our offices in New Port Richey and Spring Hill, Florida—contact us to schedule an appointment at a date and time of your choosing.

April 29, 2020

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