With the COVID-19 pandemic showing no signs of stopping, homeowners and home renters have been dealing with a dilemma – how do they stay in their homes while facing financial hardship? Early in the pandemic, many home dwellers were still facing foreclosures as the economy slowed.
But all that changed when the public began pushing back. On March 18, the Department of Housing and Urban Development, the Federal Housing Administration, and the Federal Housing Finance Agency announced a mandate that would plause foreclosures and evictions on single-family homes for 60 days. It was eventually extended to August 31 with talks of another extension.
In addition to the home foreclosure moratorium, HUD announced mortgage servicers would give home loan borrowers a six-month forbearance due to financial difficulties brought on by COVID-19. The mandate allows borrowers to ask for an additional six months.
Along with HUD, FHA and FHFA, the Department of Agriculture announced it would allow lenders to give 180-day loan deferments without authorization to participants in the Rural Development program. This mandate lasts through September 30.
Trickle-Down Theory: COVID-19 Foreclosure Edition
In densely-populated states and major metropolitan areas, there are moratoriums or limitations set in place when it comes to in-person and state court hearings. Some have begun to expire or are soon to be lifted, while others will remain in place for the foreseeable future.
Along with moratoriums and limitations both state- and city-wide, foreclosures may be harder to file as getting an assigned judge is proving to be difficult. This will only lead to further delays.
Dealing with Foreclosures in the DMV
In Washington, D.C., the Superior Court decided to stop all residential evictions and foreclosures on March 13. It began conducting remote hearings for select landlord/tenant and foreclosure proceedings if it didn’t pertain to rent non-payment or occupied homes.
The city council proceeded to pass a bill requiring mortgage servicers to develop and offer a program centered on 90-day payment deferments and waiving any borrower’s fees and extending their mortgage repayment plan. Any benefactors of the program must reduce their tenants’ rent. Certain foreclosures are prohibited under legislation passed by the council.
Just miles away from D.C., Maryland’s Governor Larry Hogan issued executive orders prohibiting residential foreclosures and evictions of residential, commercial, or industrial tenants during the current pandemic. The orders were renewed on July 30.
In Virginia, the state government passed legislation putting a halt to eviction and foreclosure proceedings dealing with homeowner-landlord disputes, which was enacted on May 26. It will remain in effect until further notice.
Much like the rest of the nation, the DMV area is allowing for more wiggle room for homeowners. There seems to be a collective effort to help those in need due to a slowing economy, record unemployment and uncertainty.
