Foreclosure Moratorium Extensions Have Expired: What’s Next For Homeowners And Renters
The impact of the COVID-19 pandemic has touched Americans in many ways. Amid economic shutdowns and a global health crisis, many relief measures were put in place. For homeowners, there were new forbearance options put in place and a reoccurring foreclosure moratorium extension.
Now that foreclosure moratoriums have ended, it’s natural for those struggling to wonder what’s next. We’ll go over what to expect, how you can check to determine what your rights are in your area and your options for moving forward in your home.
When Did The Foreclosure Moratorium End?
The last foreclosure moratorium extension at the federal level expired July 31, 2021.
The idea of the foreclosure moratorium was to provide homeowners and renters temporary relief while the pandemic was causing financial hardship related to economic shutdowns. Consumers could use this time to apply for longer-term relief if necessary.
What Happens Now?
In short, if you don't make payments on your mortgage or you don't make other arrangements for assistance, the end of the foreclosure moratorium means your servicer can start the process of foreclosing on the property. Or, if your loan is already in foreclosure, your servicer will resume the foreclosure activity which could result in you losing your home. That's the bad news.
The good news is you still have options for assistance. You may be able to gain relief through mortgage forbearance, which is a temporary pause in your monthly mortgage payments. The original CARES Act provided clients with the right to request up to 12 months of forbearance. Depending on circumstances, forbearance extensions may apply as well.
Speak with your servicer (the entity you make your payment to) to go over your options. If you’re a Rocket Mortgage® client requesting relief, you can find options by logging into your account. As you near the end of your forbearance period, your servicer will go over options that you may have to either extend your forbearance or catch up on your payments when your forbearance ends.
We’ll go over options that may be available to you to get current on your payments coming out of forbearance below. Take a deep breath. Your servicer will work with you to find the best option you qualify for.
Will The Foreclosure Moratorium Be Extended Again?
As of this writing, there’s been no action taken to reimpose a foreclosure moratorium at the federal level. However, some states and localities may make use of their powers to provide foreclosure relief, so you should check what’s on the books in your area.
This is a nonexhaustive list, but by way of example, Oregon has extended its foreclosure moratorium until December 31, 2021. In the state of New York, foreclosure moratoriums are in place until January 15, 2022.
What Are My Options For Catching Up On Payments?
If you’re a homeowner who has been on a forbearance, you may be wondering what options you have once the forbearance has ended. What happens when it comes time to begin repayment?
We’ll say upfront that your options may depend on what you can financially qualify for as well as what’s offered by the mortgage investor holding your loan (for example, Fannie Mae, Freddie Mac, FHA, VA, etc.). Your servicer will work with you to determine what may be available to you.
It should also be noted that you can make a partial or full payment if you can afford it while on forbearance with the custom payment option within your account.1 Any payment you can make will lessen the amount you owe at the end of your forbearance.
You have the option of paying the total past-due amount to bring your loan current immediately. This isn’t a requirement, but it is available to you. This is referred to as reinstatement.
When your forbearance ends, you may qualify for one or more of the following options.
- Repayment plan: Your servicer will add part of your past-due balance to your mortgage payment each month until you’re current on your mortgage.
- Deferral or partial claim: All or part of your past-due balance will be set aside to be paid at a later date. The payment is due when you refinance, sell your home or otherwise pay off the mortgage.
- Loan modification: Under a loan modification, the terms of your loan are changed to include your past-due balance.
If you no longer have the financial ability to pay the mortgage, we suggest you sell the property, pay off the servicer and relieve yourself of the obligation.
The Bottom Line
Federal foreclosure moratoriums put in place in response to the financial hardships related to economic shutdowns caused by the COVID-19 pandemic expired July 31, 2021. States and municipalities may have their own laws in place, so be sure to check the rules in your area.
With the expiration of federal moratoriums, homeowners in areas without a separate policy in place can be evicted for not paying rent or making their mortgage payments. However, there is rental relief available and homeowners should look into their forbearance options by contacting their servicer. As a reminder, Rocket Mortgage clients can sign into their account.
When your forbearance ends, you may have several options including a repayment plan, deferral or partial claim, or a loan modification if immediate reinstatement isn’t feasible. Your servicer will go over options.
For more information on what you can expect if entering a forbearance as a result of the pandemic, check out Rocket Mortgage’s COVID-19 mortgage relief guide.
1 Rocket Account is your account created in connection with Rocket Mortgage, Rocket Loans or Rocket Homes Real Estate LLC. Rocket Mortgage, Rocket Loans and Rocket Homes Real Estate LLC are separate operating subsidiaries of Rocket Companies, Inc. Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation and applicable legal and regulatory requirements.