Since March 2020, much of the world has experienced health, social, and financial strain. The COVID-19 pandemic impacted many aspects of life and put many jobs on hold. With the lack of job security, many individuals have had difficulty keeping up with their loans. That includes mortgage loans, too. When you sign a loan, you agree to put monthly payments towards your total loan amount and interest until the balance is fully paid off. If you can’t make your monthly payments, there are potential consequences unless certain changes are made. Set up a free consultation today to learn about the foreclosure moratorium.
What is Foreclosure?
When you can no longer make your monthly payments, you are in default of your mortgage loan. When you are in this default period, your creditors have the right to the legal proceeding known as foreclosure. Foreclosure is the legal action that describes the process of repossessing mortgaged property when the borrower fails to fulfill the previously agreed terms. When this happens, the homeowner forfeits the right to their property and the creditor can repossess the property. The creditor can sell the property and retain the value to cover the debt owed by the borrower.
What is a Foreclosure Moratorium?
In the case of a foreclosure moratorium, all foreclosures are prohibited. This means that even if you are in default of your mortgage, the creditor cannot pursue a legal foreclosure against them. These are often imposed during times of national financial strain. A foreclosure moratorium prevents a neighborhood’s population from declining by decreasing the number of vacant properties in the area. In turn, this prevents potential crimes and vandalism. Lastly, foreclosure moratoriums give borrowers more time to reevaluate their financial standpoint.
Why is the Foreclosure Moratorium in Place, and How Long Will It Last?
The foreclosure moratorium has ended and studies have shown that it is increasing the number of mortgage foreclosures occurring. In the COVID-19 Emergency Eviction and Foreclosure Act of 2020, a foreclosure and eviction moratorium was in place. This began on December 28, 2020, and ran until May 1, 2021. However, for people still experiencing financial hardship related to COVID-19, they will receive some protections until January 15, 2022. To be eligible for this moratorium, the property owner must possess 10 or fewer dwellings and submit a Hardship Declaration. If you’ve already submitted a Hardship Declaration from the moratorium’s previous enactment, it still applies and automatically extends until the end date in January.
What to Do After the Foreclosure Moratorium
Though there is a foreclosure moratorium in place currently, it’s vital to be prepared for what will happen after January 15th. That means if you are still in default of your mortgage and you are unable to make payments towards your mortgage, your creditors may legally enter the foreclosure process as long as the moratorium isn’t extended. To prepare yourself for the future, consider all of your options for avoiding foreclosure. You may be able to work with your lender and refinance your debt, apply for loan modifications, or even file for bankruptcy.
Hire an Experienced Attorney
Once the eviction and foreclosure moratorium cease, be ready for all possibilities by hiring an experienced attorney. The attorneys at the Foreclosure Defense Group have been in business for over 50 years cumulatively and have an A+ Better Business Bureau rating. We offer free consultations to all of our clients so we can get to know you best and understand how we can help you the most. The foreclosure process is difficult, and it always helps to have an experienced attorney on your side. Call us today to get more information about the foreclosure moratorium and steps you can take to lessen your future strain.