Foreclosure and eviction are everyday concerns for many Pennsylvanians as they deal with the disruptions caused by COVID-19. Fortunately, for homeowners and some residential tenants, there are possible solutions. Here we will answer some common questions about foreclosure and eviction moratoriums, forbearances, and related news.
It depends. A landlord cannot evict a residential tenant for nonpayment of rent if the tenant qualifies for a moratorium. However, 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.
What about local moratoriums? For the most part, Pennsylvania state and local eviction and foreclosure moratoriums have ended, although there are some exceptions in some counties and for tenants in certain rental assistance programs. (See below.)
Yes. Pennsylvania is accepting applications for rental and utility assistance though the Emergency Rental Assistance Program. Some counties, such as Philadlephia, 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, though 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 Philadlephia, a landlord cannot lockout 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 has filed an application with the Philadelphia Rental Assistance Program. Other counties have similar restrictions.
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.
For many Pennsylvanians with federal or federally backed loans, the answer is no (at least in the short-run). For example, the Federal Housing Finance Agency ("FHFA") (Fannie Mae and Freddie Mac-backed loans), FHA, VA, and USDA have all issued moratoriums on foreclosures and evictions. However, foreclosures are possible for most mortgages that are not federally backed.
The U.S. Federal Housing Finance Agency (FHFA) and U.S. Departments of Agriculture (USDA), Veterans Affairs (VA), and Housing and Urban Development (HUD), have extended their foreclosure and eviction moratoriums to September 30, 2021. For homeowners with loans backed by Freddie Mac and Fannie Mae (GSE-backed loans), the moratorium will offer protection through September 3O, 2021.
It depends on what type of mortgage loan you have. 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 must offer you a forbearance. Typically, banks are offering three-month forbearances that can be renewed for up to a year. The specific payback options include adding the forbearance amount to the end of the loan (deferral), paying back the full amount in a lump sum, or a payment plan. At least 70% of all mortgage loans fall into the government-backed category.
These programs have been extended for FHA-HUD, VA, and USDA loans until through August 30, 2021, as long as you previously requested a forbearance on or before June 30, 2020. For Fannie Mae and Freddi Mac Loans, you must have been in forbearance on or before February 28, 2021.
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, be sure that you understand the repayment terms before accepting it.
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 will 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.