After several extensions since it was first enacted in the spring of 2020, the federal government’s COVID-19 foreclosure suspension (aka foreclosure moratorium) expired on Saturday, July 31.
So, what does this mean?
First off, the foreclosure moratorium is often confused with the eviction moratorium.
The foreclosure moratorium expiration means that mortgage companies can now move forward with foreclosure proceedings.
Note: Mortgage companies may begin foreclosure proceedings after not receiving any communication from homeowners for 90 days. Therefore, homeowners who are behind on their mortgage payments and haven’t communicated with their mortgage companies face the most risk for foreclosure. If you’re experiencing financial hardship, it is crucially important to contact your mortgage company immediately and let them know.
The eviction moratorium protects renters from being evicted. A new eviction moratorium enacted in the first week of August is currently in effect until Oct. 3, 2021. However, it only applies to certain areas of the country that are at high risk for the spread of COVID.
Regarding the foreclosure moratorium, there is still some good news:
- Until Sept. 30, 2021, homeowners may continue to request a COVID-19 Forbearance, or an extension of up to 18 months for an existing forbearance, under the CARES Act
- Mortgage companies must work with homeowners to discuss other mortgage relief options before beginning foreclosure proceedings
- Homeowners who lose their homes to foreclosure and had mortgages backed by Fannie Mae, Freddie Mac, or the FHA will not be evicted until Sept. 30, 2021
If you feel you may not be able to make your mortgage payments or if you have a forbearance that is coming to an end, contact your mortgage company immediately to discuss your mortgage relief options.
If you need help understanding your options or communicating with your mortgage company, consider contacting a housing counselor for help.
For more information regarding COVID-related financial hardship, check out these posts:
- Interested in ways to lower your monthly mortgage payments? Learn about new options from the federal government.
- Offer for help sounds too good to be true? How to spot a mortgage relief scam.