Paying Your Mortgage and Foreclosures During the COVID-19 Coronavirus Crisis

Updated on 9/14/2020 11:45 a.m.

New: Vermont COVID Emergency Mortgage Assistance Program
Starting July 13, 2020, Vermont Housing Finance Agency (VHFA) accepts applications for the Vermont COVID Emergency Mortgage Assistance Program. The program is funded through the federal CARES Act. It will help Vermont homeowners facing economic hardship because of the COVID-19 pandemic. This program is available to all Vermonters with mortgage payments on their primary residence who meet the income requirements — not just those with a VHFA mortgage. The program could help pay up to six missed monthly mortgage payments. Starting September 1, a revised application lets you apply for money to put toward past-due property taxes (for homeowners who pay taxes directly to their town). To learn more about the mortgage assistance and property tax assistance, read below.

Video: On July 23, 2020, Vermont Legal Aid Attorney Grace Pazdan talked about the new financial help homeowners can get to pay overdue mortgage payments and other programs for homeowners who may be facing foreclosure. Watch the video on Facebook.

This page is about foreclosures. For evictions, visit our page about evictions during COVID-19

You may have heard of a “moratorium on foreclosures.” There are three laws or rules that affect Vermont evictions and foreclosures: the federal CARES Act, the Vermont Judiciary’s emergency rules, and a state law called S.333. 

  • The federal CARES Act prevented the filing of foreclosures on federally backed mortgages in court between March 18 and May 16, 2020. Federally backed mortgages are those financed or guaranteed by Fannie Mae, Freddie Mac, USDA Rural Housing Service (USDA), Federal Housing Administration (FHA), and Veteran’s Administration (VA). 
  • Fannie Mae, Freddie Mac, USDA, FHA and VA have all extended their own bans on foreclosures to December 31, 2020. This means that if you have a federally backed mortgage, your lender cannot take any action to foreclose on your home until 2021.
  • S.333 “stays” (pauses) all foreclosures of occupied residences as of May 14, 2020, until the governor declares an end to the State of Emergency, plus 30 days after that. 

Be sure to check this page again as it will change whenever the rules change. 

If you have questions after reading the information below, contact us to ask for help.

More on the federal CARES Act and foreclosure

The federal CARES Act provides some help if you have a mortgage that is federally backed. This includes mortgages financed or guaranteed by Fannie Mae, Freddie Mac, USDA, FHA or VA. You can use the following information to find out if you have a federally backed mortgage:

  • Fannie Mae and Freddie Mac have loan look-up tools. You can see if they own your mortgage.

  • To determine if your loan is FHA-insured, look for: an FHA case number on your mortgage document, specific language in the mortgage and note forms, or an FHA premium on your mortgage statement. In some cases, loans may have been stripped of their FHA-insured status. Call the Department of Housing and Urban Development (HUD) National Servicing Center at 877-622-8525 if you have questions.

  • A VA-guaranteed loan has specific language in the note and mortgage identifying it as a VA loan. You will also see fees paid to the VA noted in closing documents.

  • If you have a mortgage directly extended by the USDA Rural Housing Service (RHS) you may be very familiar with the agency. However, if you have a privately serviced USDA RHS-guaranteed loan, you may not know that. If you think you may have a RHS-guaranteed loan, ask your mortgage servicer / lender to review your closing documents for you.

Under the CARES Act, a mortgage servicer / lender of federally backed mortgage loan may not:

  • start a judicial or nonjudicial foreclosure process

  • move for a foreclosure judgment

  • order a sale, or

  • execute a foreclosure-related eviction or foreclosure sale

between March 18 and May 16, 2020. This applies even if you do not have a hardship due to COVID-19. See § 4022(c)(2). Note: Fannie Mae, Freddie Mac, USDA, FHA and VA have recently extended their own bans on foreclosures. See above.

If you have a federally backed mortgage loan and you have financial hardship due to COVID-19, you can ask for and get a forbearance (postponement) of mortgage payments for up to 180 days. You can then ask for and get additional forbearance for up to another 180 days. During the forbearance period, no fees, penalties, or interest will accrue on your mortgage account beyond the amounts scheduled or calculated. It will be as if you made all payments on time and in full under the terms of the mortgage contract. This appears to apply during the COVID-19 emergency or until December 31, 2020, whichever is earlier. See § 4022(b), (c)(1).

If you do not have a federally backed mortgage

If you are impacted by COVID-19 and you are not able to make mortgage payments, contact your mortgage servicer / lender. If you can get more time to pay, be sure to ask:

  • if you will be charged late fees, penalties or interest

  • if postponed payments will be recorded in your credit report

  • if you need to send any documents to show you are experiencing hardship due to the COVID-19 crisis.

More information

National Fair Housing Alliance (NFHA) COVID-19 web page and mortgages and foreclosure handout.

 

 

Updated: Sep 14, 2020