Foreclosure and eviction are everyday concerns for many Pennsylvanians as they deal with the disruptions still arising from COVID-19. Here we will answer some common questions about foreclosure and eviction moratoriums, forbearances, and related news.
Unfortunately, most foreclosure and eviction moratoriums have ended or are coming to an end for homeowners and residential tenants. In fact, we are already seeing a larger uptick in foreclosure cases in Pennsylvania than in many other states. However, as noted below, there are still some options available to homeowners and renters.
Yes, unless you are currently in forbearance or an agency-specific or local foreclosure moratorium covers you. Although the Federal Housing Finance Agency ("FHFA") (Fannie Mae and Freddie Mac-backed loans), FHA, VA, and USDA issued moratoriums on foreclosures and evictions, most of these moratoriums have ended or will end by December 31, 2021. Likewise, most local foreclosure moratoriums have ended as well.
The federal Consumer Financial Protection Bureau ("CFPB") has issued final Covid 19-related rules governing mortgage foreclosures that take place before January 1, 2022, which may delay some foreclosures. However, we expect foreclosure filings to continue to rise into 2022.
It depends on what type of mortgage loan you have. For example, if you have a government-backed mortgage, such as an FHA, VA, USDA loan, or a loan backed by Fannie Mae, Freddie Mac, the lender may be required to offer a forbearance or an extension of a current forbearance. (For non-government-backed loans, forbearances and forbearance extensions are mainly at the discretion of the lender.)
Quick Note: Although Covid 19-related forbearances and foreclosure moratoriums are coming to an end, you should not assume that there is no relief available. You may be eligible for other types of forbearances or deferrals offered by the lender. Moreover, mortgage modification, foreclosure defense, Chapter 13 bankruptcy, and Chapter 7 bankruptcy remain solid options for many homeowners trying to stay in their homes.
Each agency has its own eligibility requirements. For forbearance extensions, the length of the available extension depends upon the date that you initially obtained a forbearance. (For example, see the FHA's forbearance extension requirements (as of August 27, 2021). The agencies provide information about foreclosure prevention programs on their websites:
In a forbearance, your mortgage lender agrees to allow you to stop making payments on your mortgage loan or make partial payments temporarily. You must pay back the missed payments at some point. The typical specific payback options include:
A forbearance is different than a deferral, whereby the lender moves missed payments to the end of the loan and brings your account current.
If your mortgage loan is not government-backed, there is no forbearance requirement. However, some such lenders are offering forbearances. Note that these lenders are not required to allow you to tack the forbearance amount to the end of the loan. Therefore, even if the lender offers a forbearance, you should be sure that you understand the repayment terms before accepting it.
You can apply for a loan forbearance while you are in Chapter 13 bankruptcy. For more, see our post on Covid-19 and bankruptcy.
It should not, as long as you can repay the forbearance amount under one of the options offered by your lender. Under the CARES act, your loan status at the time of the forbearance is frozen. For example, if you were current, your loan would continue to be reported as current during the forbearance. If you were sixty days behind, the forbearance would show you sixty days behind during the forbearance (unless the forbearance was retroactive and cleared the arrearage).
That is not to say that some lenders will not consider a CARES forbearance in some way, but it should not hurt your credit rating. However, it will not necessarily clear negative information already on your report.
You can apply for a loan forbearance while you are in Chapter 13 bankruptcy. For more, see our post on Covid-19 and bankruptcy.
Quick Note: When a home ends up in foreclosure, homeowners sometimes consider a deed-in-lieu of foreclosure or short sale. In some instances, they are good solutions. However, you should not agree to either option without discussing the matter with an attorney, as both can have tax and other consequences.
For the most part, the answer is yes. On August 26, 2021, the U.S. Supreme Court overturned the CDC's extension of its eviction moratorium. Therefore, evictions may proceed, absent a state or local moratorium.
For the most part, Pennsylvania state and local eviction moratoriums have ended, although there are some exceptions in some counties and for tenants in specific rental assistance programs. (See below.)
Yes. Pennsylvania is accepting applications for rental and utility assistance through the Emergency Rental Assistance Program. Some counties, such as Philadelphia, Bucks, Berks, Chester, Delaware, Lancaster, Lehigh, and Montgomery counties, have their own application process.
You can access the county applications through their websites or, in some cases, through the state's Compass site. Some Pennsylvania cities and towns have rent and utility assistance programs as well. For general information on housing assistance, visit the Pennsylvania DHS Housing Resources page.
Quick Note: In Philadelphia and some other counties, a landlord cannot lock out a tenant if the tenant's application for rental assistance has been marked complete. Moreover, the landlord cannot file a petition to evict a tenant until 45 days after the tenant filed an application with the Philadelphia Rental Assistance Program.
Yes. The VA has implemented a "one-stop" site for veterans facing eviction, foreclosure, or other housing issues. The VA's Partial Claim Payment (VAPCP) program allows vets to make partial payments on mortgage loans and defer the remainder. This program is available until October 28, 2022.
Philadelphia Bankruptcy Attorney is published by Harborstone Law. Harborstone Law represents clients in bankruptcy and debt relief cases throughout Philadelphia and the surrounding Pennsylvania counties.
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