Federal Protection Against Foreclosure Ended July 31
When the moratorium on foreclosures of government-backed mortgage loans ends on July 31, lenders may once again initiate foreclosure actions, and the homeowners targeted by these actions will require the advice and services of a Fort Lauderdale foreclosure attorney.
The moratorium on foreclosures first took effect back in April 2020, when the federal government established the moratorium to prevent banks and other lenders from foreclosing during the unprecedented COVID-19 pandemic, which threw many people out of their jobs.
The moratorium, which covers federally-backed, single-family homes, is now set to expire on the last day of this month (July 2021). The moratorium was previously scheduled to expire on June 30, but the Biden administration stepped in and provided what appears to be one last extension.
Three federal departments back mortgages: the Department of Housing and Urban Development, the Department of Veterans Affairs, and the Department of Agriculture. Additionally, the Federal Housing Finance Agency oversees the Fannie Mae and Freddie Mac lending programs.
On July 31, all of these federal departments and agencies will end the moratorium on federally-backed, single-family home foreclosures.
What Should You Know About the Moratorium on Foreclosures?
The moratorium has given delinquent homeowners an opportunity to catch up on their late mortgage payments or to work out alternative payment arrangements with their mortgage lenders.
While many homeowners have taken advantage of the opportunity provided by the moratorium, other homeowners did not or could not. Some observers now believe that with the end of the moratorium, a record number of foreclosure cases may flood the courts.
Nationally, an estimated ten million homeowners are behind in their mortgage payments, and 1.7 million of them are ninety days or more past due. According to the South Florida Sun-Sentinel, more than 2,000 foreclosure cases are currently pending in Broward County.
How Many Foreclosures Are Expected?
The current number of pending foreclosure cases is only part of the story. Thousands of other cases have not been filed because of the pandemic and moratorium, so thousands of homeowners could see foreclosures filed starting on August 1, the day after the moratorium expires.
Home foreclosures are not at all rare in south Florida. In 2019, for example, when the south Florida region had the 16th-highest foreclosure rate in the nation, there were more than 16,000 foreclosure filings in Broward, Palm Beach, and Miami-Dade counties.
In south Florida, if you have not been able to bring your mortgage payments up-to-date, if you believe that your home will be foreclosed, or if you receive a notice of foreclosure, contact a Fort Lauderdale foreclosure attorney immediately for the advice and help you will need.
How Will Your Attorney Help You Fight a Foreclosure?
There are a number of effective and legal ways to avoid a foreclosure. The option that is best for you will hinge on a number of factors. If you want to stop a foreclosure, your best options are usually seeking a loan modification or filing a Chapter 13 bankruptcy.
Your other alternatives for stopping or preventing a foreclosure include a short sale, a Chapter 7 bankruptcy, or a deed-in-lieu of foreclosure. However, a short sale will mean leaving your home, and a deed-in-lieu of foreclosure will transfer the ownership of your home to the lender.
Is There Another Option?
There is one other possibility. In a foreclosure, if a lender is missing mortgage notes, has careless or disorganized paperwork, or fails to follow legal procedures precisely, the lender can lose the case. Florida law requires a lender to prove that it is in fact legally entitled to foreclose.
In other words, before it can initiate a foreclosure in this state, a lender must actually own the mortgage and prove that it owns the mortgage. Home mortgages today are typically bought and sold so many times that the true owner is often quite difficult to identify.
When a lender has sold the mortgage to multiple parties, it must show the proof of each sale along with the retention of foreclosure rights with each transfer, or it’s possible that the foreclosure action may be dismissed.
Properly examining the documents in a foreclosure and developing an effective foreclosure defense on your behalf requires an attorney who has considerable experience in foreclosure proceedings.
How Does a Loan Modification Work?
If you and your foreclosure attorney can work out a loan modification with the mortgage lender, it will allow you to stay in your home. A loan modification is a legally binding change to one or more of the conditions of the loan’s repayment. A home loan can be modified to:
- extend the term of the mortgage
- reduce the interest rate
- reduce the principle
What Is a Deed-in-Lieu of Foreclosure?
The deed-in-lieu option transfers your home’s title to your mortgage lender. A deed-in-lieu of foreclosure is established when a homeowner voluntarily gives title of the property to the mortgage company.
A deed-in-lieu of foreclosure can help Florida homeowners who want to walk away from a property while avoiding the consequences of a foreclosure. Lenders will often accept a deed-in-lieu of foreclosure to save legal fees and to bring the matter to a quick conclusion.
What About the Bankruptcy Option?
Filing for bankruptcy immediately stops the foreclosure process. When you file for bankruptcy, the bankruptcy court issues an automatic stay that requires all of your creditors, including your mortgage lender, to cease immediately all collection efforts or legal proceedings against you.
Before you decide on the bankruptcy option, discuss your alternatives for dealing with a foreclosure with a Fort Lauderdale foreclosure lawyer. Bankruptcy is generally a last resort, and a bankruptcy always entails some serious negative financial consequences.
For most south Florida homeowners, having your attorney negotiate directly with your mortgage lender will be a better option than filing for bankruptcy.
What Option Is Best For You and Your Family?
Your personal, family, and financial circumstances will determine whether your best option for dealing with a foreclosure is filing for bankruptcy, accepting a deed-in-lieu of foreclosure, selling your home, or working with the lender on a loan modification.
If your mortgage lender has violated the law or your rights as a homeowner in any way, a south Florida foreclosure attorney can move immediately to postpone or to stop the foreclosure. The right foreclosure attorney will help you to understand the process, will guide you through the legal proceedings, and will effectively protect your family and your interests.