Posted on: April 7, 2020

Foreclosure Prevention

Current as of April 30, 2020. This is a rapidly changing situation. Please check back for updated information.

1. I cannot pay or am behind on my mortgage, but have NOT been served with court papers, can my lender foreclose on me during the COVID crisis?

(If you missed the sheriff’s attempt to serve you, there could already be a foreclosure judgment, and so this part does not apply to you. See the question about having missed service, further below.)

No, if you have not been served and have not missed service, lenders cannot foreclose on you during the COVID Crisis. But if you wait until a foreclosure court suit is filed against you, it will usually cost thousands more to save your home. So even though court deadlines are not running, it is best to act now to see if you can save your home.

The soonest a lender can get a foreclosure judgment against you is May 15th. The May 15th date may get extended. For an update, check before then at https://slls.org/faq-for-legal-deadlines-during-the-covid-19-crisis/

If your mortgage is under any of the following federal programs, your lender cannot start or proceed with a foreclosure until at least May 18, 2020:

  • FHA
  • Fannie Mae (FNMA)
  • Freddie Mac (FHLMC)
  • USDA direct or guaranteed loan
  • VA loan, direct or guaranteed loan

If I am not sure if my mortgage is with one of the federal programs above, how do I find out?

    • You can look for this information in all the papers you received when you went to closing on the loan (e.g., the documents you received when you signed the mortgage and mortgage note when you first got the loan), or
    • You can also call the federal programs directly to check at the numbers below:
      • FHA - 1-877-622-8525
      • Fannie Mae (FNMA) - 1-800-2FANNIE (1-800-232-6643)
      • Freddie Mac (FHLMC) - 1-800-FREDDIE (1-800-373-3343)
      • USDA direct or guaranteed loan - 1-800-414-1226
      • VA loan, direct or guaranteed loan - 1-877-827-3702

Also see the section below about help in paying your loan.

2. I missed or avoided the sheriff who is trying to serve papers. Is my home safe?

No. If you are far behind on your mortgage, a court suit could have been filed before the COVID crisis put a hold on court cases.

If the sheriff missed you for service several times, the court may have appointed an attorney to accept the court service for you, and the court can or may have taken action without you knowing about it.

You can call the state “District Court” for the parish you live in to see if a suit has been filed against you. (If you live in Baton Rouge, you also need to check with the Baton Rouge City Court.)

If a foreclosure suit has been filed:

  • It is better for you to find out and be involved in the suit than to just let the court issue a judgment against your home.
  • If you act before the court appoints an attorney to accept service for you or they start to work, it may also save you from having $500 or more added to what you owe on your house.
  • See the question below for people who have a foreclosure court case filed against them for more important information.

3. Can I get help to afford my loan?

There will be some income assistance because of the COVID crisis:

  • “Stimulus payments” of $1200 per adult and $500 per child for most families. If you do not have your federal income taxes directly deposited or taken out of your bank account, this money will not arrive in April and could take quite a while. For more information, see https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
  • Unemployment benefits will increase by $600 a week and will be extended to 39 weeks, along with other changes making them more available for people whose ability to work is affected by COVID. For more information, see https://slls.org/7493-2/

You can ask your mortgage company to “work with you” to extend payments or for a repayment plan:

  • You should be careful about understanding the terms of any forbearance (e.g., delay in payments), extension, or option if you are granted one.
  • Some forbearances move payments to the end of the entire loan period. (For example, after the entire remaining years of a 30-year mortgage term.)
  • Others require immediate payment of the delinquent amount at the end of the delay. (For example, immediately after the 3 or however many months delay that you get.)
  • You should keep written proof from your lender of any forbearance agreement.

If your mortgage is with one of the federal programs listed above:

    • You can request a forbearance (e.g., delay in payments) by submitting a request to your mortgage company explaining that you are having money problems due to the COVID-19 emergency.
      • Contact your servicer to see how they would like you to submit your forbearance request. We recommend submitting your request in writing and keeping proof of your submission for your own records.
      • On receiving your request for forbearance, your mortgage company is required to delay your payments for 180 days.
      • You can request up to another 180 days during the COVID-19 emergency.
      • You can later request that the forbearance be shortened.
      • No fees, penalties, or interest beyond normal can be charged when your payments are made on time and in full on the new schedule. Normal interest will still be charged during the period.
    • These federal programs each have more options, too, that you can apply for to help avoid foreclosure. Consult your mortgage company about other options such as a repayment agreement or a loan modification. However, there is no guarantee you will be offered something or that it would be affordable for you.

If your mortgage is NOT with one of the federal programs listed above:

    • Some mortgage companies may still allow you a forbearance period due to financial hardship even if just a month or two. Sometimes they might not collect interest, due to the COVID-19 emergency.
    • This must be requested directly, often in writing, from your mortgage company.

Depending on your finances, filing a Chapter 13 Bankruptcy could stop any foreclosure and extend your payments. However, once the Bankruptcy repayment plan is in effect, your monthly payments will be higher than under your original loan. You should seek the advice of an attorney about filing a Chapter 13 Bankruptcy, as a bankruptcy is a complicated legal proceeding that would be very difficult to manage without the help of an attorney.

To see if you can get free help dealing with repayment options to save your home, you can call Southeast Louisiana Legal Services to see if we can offer free help. You can apply for services by online at https://lastate.kempscaseworks.com/server/shared/a2jviewer.htm or by calling one of our offices.

  • Baton Rouge: 225-448-0080
  • Hammond: 985-345-2130
  • New Orleans: 504-529-1000

All numbers listed lead to the same few attorneys; only call one.

4. I have been served with court foreclosure papers. What do I need to do?

This depends on what the papers say.

If your court papers say they are a “writ for seizure and sale” or “notice of seizure and sale":

  • The court has already ordered the property be sold at sheriff sale.
  • You can appeal the foreclosure order within 15 days of when you were served with this paperwork. This period is delayed (extended) while the courts are closed during the COVID crisis. If you were served after March 8th, you may still have the opportunity to appeal and there should be a hold on your sale. However, these appeals are expensive and most people cannot afford them. If you would like to try this option, we recommend that you talk to a lawyer immediately.
  • You should contact the sheriff for your parish by phone immediately to find out the date of the sale. This is the date when you may lose your home. See Question 5 “My property was set for a foreclosure sale through sheriff’s auction before the courts closed” for more information and your other options.

If your court papers say you have 15 days to file an “Answer” to the suit:

  • You do not have to Answer or ask for an Extension within the 15 days because of the COVID delays in the court. See information in Question 1 about how long the delay will be.
  • You do have to deal with the “15 day” deadline before the delay ends, or a court may be able to enter judgment against you when it does.
  • Cases like this can require a lot of work or preparation. You should consider applying now for free legal help to save your home using the internet site or one of the phone numbers above.
  • Your “Answer” responding to the suit should not just respond to each claim made in the petition. The help of a lawyer is important because certain defenses are lost if not included in the answer. Some are not direct responses to what the other side’s papers say. A lawyer may also help see if you have a case against the mortgage company that you can add to the suit.

5. My property was set for a foreclosure sale through sheriff’s auction before the courts closed.  

Any date listed on papers you received was subject to change. No one has to notify you if the date changes or changed. So regularly check on the sale date with the sheriff’s office.

Many parishes have postponed foreclosure sheriff sale auctions due to the COVID-19 pandemic. Contact the sheriff for your parish by phone to see if sheriff sales have been delayed and continue to contact the sheriff's office for your parish on a regular basis to check if a new sale date has been set to make sure you’re aware of when you may lose your home.

6. What do I do if I receive a notice from the court, a Justice of the Peace, or a Constable while the courts are closed?

Courts are currently closed until May 15th, but the date may be extended. For an update, check before May 15th at https://slls.org/faq-for-legal-deadlines-during-the-covid-19-crisis/

If you receive a notice from a court, a Justice of the Peace, or a Constable while the courts are closed, you should seek the advice of an attorney. You can apply for free legal help by calling Southeast Louisiana Legal Services at the phone numbers listed above.

Read Full Article