Foreclosure Floodgates: Preparing for Post-Moratorium Waves
The COVID-19 pandemic has caused a financial crisis on a global scale, and the effects are visible in many aspects of society. One area that has been significantly impacted is the housing market, with millions of homeowners facing financial hardship and uncertainty. As a result, governments and banks have imposed moratoriums on foreclosures to provide temporary relief for struggling homeowners. However, as these moratoriums start to expire, it is essential to prepare for the potential floodgates of foreclosures that may follow. In this article, we will discuss the looming post-moratorium waves and how to navigate through them.
What is a Foreclosure Moratorium?
A foreclosure moratorium is a temporary suspension or delay of foreclosures. This measure is typically imposed by the government or financial institutions to provide relief for homeowners facing financial difficulties. The purpose of a moratorium is to prevent a surge of foreclosures and give homeowners time to recover from unforeseen circumstances, such as a pandemic, natural disaster, or economic recession.
The Impact of COVID-19 on Foreclosure Moratoriums
The COVID-19 pandemic has had a significant impact on the housing market, resulting in millions of Americans facing financial challenges. As a response, the CARES Act was passed in March 2020, which provided a 60-day moratorium on foreclosures for federally-backed mortgages. This moratorium was later extended multiple times, with the most recent extension expiring on June 30, 2021. While this provided temporary relief for homeowners, the moratoriums are now coming to an end, and many are concerned about the potential flood of foreclosures that may follow.
The Expected Post-Moratorium Waves
Once the foreclosure moratoriums end, experts predict that there will be a surge of foreclosures in the housing market. According to a report by ATTOM Data Solutions, there were only 7,042 foreclosure filings in March 2021, much lower than the average of 278,911 per month before the pandemic hit. However, this number is expected to increase significantly once the moratoriums are lifted. With millions of homeowners still struggling to make mortgage payments and high unemployment rates, there is a high risk of default and subsequent foreclosures.
Preparing for the Post-Moratorium Waves
1. Understand Your Options
If you are facing financial hardship and are at risk of foreclosure, it is essential to understand your options. Some of the options available to homeowners include loan modifications, repayment plans, forbearance, and refinancing. These options may help to reduce monthly mortgage payments or provide temporary relief until financial stability is regained. It is essential to contact your mortgage servicer to discuss the best option for your situation.
2. Seek Financial Assistance
There are various financial assistance programs available for homeowners who are struggling to make mortgage payments. For example, the Emergency Rental Assistance Program (ERAP) provides financial assistance to eligible renters and homeowners impacted by the pandemic. Other programs, such as the Hardest Hit Fund, offer mortgage payment assistance for homeowners in certain states.
3. Consult a Professional
If you are unsure of how to navigate through the post-moratorium waves, it may be beneficial to seek advice from a professional. A housing counselor or attorney can help you understand your options, negotiate with your mortgage servicer, or represent you in court if necessary.
In Conclusion
The impending end of foreclosure moratoriums is a concerning issue for many homeowners. However, it is crucial to understand that there are options available to help navigate through the post-moratorium waves. Seeking financial assistance, understanding your options, and consulting a professional are essential steps to take to minimize the risk of foreclosure. The key is to be proactive and prepared for potential challenges that may arise.
As we continue to navigate through the effects of the pandemic, it is essential to stay informed about any changes in mortgage regulations and take necessary precautions to prevent foreclosure. The post-moratorium waves may be challenging to navigate, but with the right knowledge and resources, homeowners can overcome these challenges and regain financial stability.
