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 March 31, 2021. (For the most part, Pennsylvania state and local eviction moratoriums have ended.)
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 March 31, 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 February 28, 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. About 75% of all mortgage loans fall into the government-backed category.
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.
It appears that the Pennsylvania legislature may be ready to pass a multi-million dollar Covid-19 relief package that includes rental and utility assistance. We will report the details when available.
Philadelphia Bankruptcy Attorney is published by Harborstone Law. Harborstone Law represents clients in bankruptcy and debt relief cases throughout Philadelphia and the surrounding Pennsylvania counties.
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