Your Covid Forbearance and the Foreclosure Moratoriums are Coming to an End:  What Should You Do? 

When the COVID-19 pandemic shut down businesses and Congress enacted the CARES Act in part to help hundreds of thousands of homeowners fell behind on their mortgages.  Most homeowners were able to qualify for a forbearance plan or some other loss mitigation relief to stay in their homes.  As the economy comes back and people are back to work, arrangements have to be made for homeowners to remain in their homes and end the threat of foreclosure. 

Now that the forbearance periods are coming to an end, homeowners who are back to work are seeking help and want to know what to do.  Most of these homeowners can afford their mortgage going forward but they do not have the savings to afford the payments, fees, and charges imposed while their loans were in forbearance.  It’s not too late and there are options to explore.  The Consumer Law Center has these general recommendations:   

First, homeowners should first contact a free, qualified housing counselor to discuss their particular situation. 

Maryland has a list of state-recognized and supported agencies around the state.  Make an appointment with an agency close to you so you can find out what programs will be available to you from the owner of your loan.  Fannie Mae, Freddie Mac, FHA, and other owners and insurers of a majority of mortgage loans have established special programs to help homeowners in need.  A qualified housing counselor can help you figure out if you have options and escalate your efforts if your servicer gives you false and misleading information.    

Second, in Maryland, the state Department of Housing and Community Development will soon announce final plans for assistance to help homeowners. 

These new programs are focused on those who cannot otherwise obtain a special COVID modification to bring their loan current or who may need some secondary help.  The preliminary plan by the state agency is going to provide for grant and loan programs to help bridge targeted gaps.  However, to access these final supports, homeowners should engage a housing counselor to aid their efforts since the State agency will likely be overwhelmed (as other agencies have been throughout the pandemic).  

Third, homeowners should keep good records of all communications with their mortgage servicers. 

Throughout the past 14 years since the beginning of the Great Recession and first housing crisis, some mortgage actors have difficulty providing accurate information to borrowers.  Nothing has changed in the current marketplace to cure this pattern in our experience.  So, based on the Consumer Law Center’s experience in this work, we recommend homeowners develop a log of all communications they have with the mortgage servicers, collectors and owners.  It is important to have notes of dates and times of telephone communications and to preserve emails if you have them.  It is also important to preserve the barrage of mail sent and to write the day you receive mail on the envelope.  Some mail is required under State and Federal law to be sent at particular times.  If a mortgage actor sends you backdated mail, a lawyer you engage needs to know that information.   Homeowners with strong records may have various legal options.  So, don’t wait until it’s too late.  Organize your communications now and continue to do so as you access help.  

Fourth, if your mortgage company or its agents or collectors are acting unfairly, deceptively, or abusively, arrange for a legal consultation to know your rights.  

During the Great Recession many homeowners sought help from non-lawyers and were scammed as a result.  We recommend if you need a lawyer you engage one through a bonafide referral service like Civil Justice Inc. in Baltimore who provides the referrals for free.  

Most importantly, homeowners should not put their heads in the sand and should reach out for help before it’s too late.   Don’t wait until it’s too late.