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. With some exceptions, evictions have begun in most counties in Pennsylvania. However, a landlord cannot evict a residential tenant for nonpayment of rent if the tenant qualifies for the CDC eviction moratorium. The CDC moratorium covers nonpayment of rent only. It does not cover other breaches of a lease, such as damaging property.
The White House has extended the CDC eviction moratorium until June 30, 2021.
What about local moratoriums? For the most part, Pennsylvania state and local eviction and foreclosure moratoriums have ended. However, Philadelphia's court-ordered eviction moratorium has been extended through June 30, 2021. (Philadlephia also has an eviction diversion program that mediates eviction issue between the landlord and tenant.
Quick Note: The CDC eviction moratorium is not automatic. If you wish to take advantage of it, you must file a specific declaration with your landlord. See our blog post for more details.
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 Federal Housing Finance Agency (FHFA) has announced that the FHA, USDA have extended their foreclosure moratoriums to June 30, 2021. For homeowners with VA loans and loans backed by Freddie Mac and Fannie Mae (GSE-backed loans), the foreclosure moratorium will offer protection through June 30, 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. This program has been extended through Jun, 30, 2021. Borrowers who obtained a forbearance before June 30, 2020, may obtain up to six more months of forbearance.
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.
You can apply for a loan forbearance while you are in Chapter 13 bankruptcy. For more, see our post on Covid-19 and bankruptcy.
Pennsylvania is accepting applicationtions 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 assess 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 of housing assistance, visit the Pennsylvania DHS Housing Resources page.