This information was last updated February, 2021.
Many homeowners have had trouble paying their mortgages because of job loss, reduced income, or illness related to COVID-19. Here are some answers to commonly asked questions about how COVID-19 affects homeowners with mortgages. Topics covered include:
- what to do if you can’t make your mortgage payment
- where to get help dealing with your mortgage company
- relief available for different types of mortgages and how to find out which type you have
- what to do if your home is already in foreclosure or scheduled for sheriff sale
I’m behind in my mortgage, or am afraid I won’t be able to pay my mortgage next month. What should I do?
If you are having trouble paying your mortgage because of an issue related to COVID-19, contact your mortgage servicer to ask for assistance and explain that the hardship was caused by the current crisis. Keep a record of all contact you have with the servicer. This might be important later if there is a question about whether or when you contacted your mortgage company.
Is anyone available to help me work with my mortgage company?
Yes! FREE housing counselors at agencies across Philadelphia funded through Philadelphia’s Department of Housing and Community Development are available to help you work with your mortgage company.
- Call the Save Your Home Philly Hotline at 215-334 HOME (4663) to be connected with a housing counseling agency.
- Don’t fall for loan modification scams. Be wary of anyone who asks you for money in exchange for getting you mortgage relief. The city’s network of housing counseling agencies offers you this help for free.
I heard that the federal government has stopped all foreclosures. Does this apply to me?
The moratorium on foreclosures only applies to “federally-backed mortgage loans,” which are FHA, VA or USDA loans, reverse mortgages insured by HUD, and loans owned or guaranteed by Fannie Mae and Freddie Mac. For these borrowers, there is a moratorium on foreclosures, including filing foreclosures or taking homes to sheriff sale. The moratorium extends through June 30, 2021. About 1 in 3 residential mortgages is not federally backed, and is not covered by this moratorium.
I heard no one has to pay their mortgage during the crisis. Is that true?
No. No one is automatically excused from paying their mortgage because of the crisis, but help is available for some borrowers who are experiencing a COVID-19 related hardship. See below for more details. If you are having a hardship, you must contact your mortgage servicer and request a forbearance or other relief. You will not get it automatically.
Am I entitled to a forbearance on my mortgage because I have a COVID-19 related hardship?
The federal CARES Act only requires mortgage servicers to offer payment forbearances for government-backed mortgage loans, meaning loans insured or owned by the FHA, VA, USDA Fannie Mae or Freddie Mac. (CARES Act § 4022.) If you have one of these types of loans and you are experiencing a hardship that is directly or indirectly related to the COVID-19 crisis, you can request a six month payment forbearance from your mortgage servicer. If the crisis and your hardship are continuing at the end of the first six months, you may be able to request and receive an extension of another six months. (Borrowers with government-backed mortgages who are already in forbearance may be eligible for additional extensions at the end of twelve months.) The mortgage company is not allowed to charge late fees or other charges because of the forbearance. A forbearance postpones your responsibility to make payments while you are experiencing hardship, but does not excuse those payments completely. Different solutions may be available for you to deal with those missed payments at the end of the forbearance, depending on the type of mortgage you have and your financial situation.
How do I know if my mortgage is FHA- or VA-insured?
An FHA mortgage will list an FHA Case No. and include the term “FHA Mortgage” on the bottom left of each page. To make sure your loan is still FHA-insured, you can call your loan servicer. A VA mortgage has language in the Note and Mortgage identifying it as VA-insured.
How do I find out I have a Fannie Mae or Freddie Mac mortgage?
- You can look up whether your loan is owned or guaranteed by Fannie Mae here or call 1-800-232-6643 and press 4.
- You can look up whether your loan is owned or guaranteed by Freddie Mac here or call 1-800-373-3343 and press 4.
I have an FHA or VA loan. What assistance is available for me?
No new foreclosure may be filed on an FHA or VA loan until after June 30, 2021. Any foreclosures in process for FHA and VA-insured mortgages are also suspended, and should not move forward until after June 30. (See HUD Mortgagee Letter 2021-05 and VA Circular 26-21-05.)
The CARES Act also provides six month payment forbearances for borrowers with an FHA or VA loan who are experiencing a COVID-19 related hardship, with the possibility of extending for another six months. If you have an FHA or VA loan, you should contact your mortgage servicer to request a forbearance. The lender cannot charge you any additional fees or penalties for the forbearance. No documentation is required. The deadline for FHA and VA borrowers to enter a forbearance is June 30, 2021.
Borrowers with FHA loans may qualify to put the missed payments to the back of the loan in a non-interest bearing balloon once they are able to resume making payments. This option is called the “COVID-19 National Emergency Stand-Alone Partial Claim.” There are also other solutions for FHA borrowers to get back on track after a COVID-related hardship, including streamlined loan modifications or a combination of loan modification and deferring payments to the back of the loan. For more details see HUD Mortgagee Letter 2021-05.
VA borrowers coming out of forbearance may also be eligible to defer payments to the back of the loan, or for a loan modification. The VA has instructed its mortgage servicers not to demand lump sum repayment at the end of a forbearance. More information for VA borrowers during the COVID crisis is here.
What protections are available for Fannie Mae and Freddie Mac Mortgages?
Fannie Mae and Freddie Mac borrowers are protected by the federal foreclosure moratorium through June 30, 2021, and are entitled to forbearances for COVID-19 related hardships. (CARES Act § 4022.) At the end of the forbearance, the lender must review the borrower for loan modification options that either lower the mortgage payment or keep it the same. Borrowers who fell behind after March 1, 2020 may be eligible to defer up to 18 missed payments to the back of the loan. See the announcement here. Other borrowers will be reviewed for loan modifications to bring the mortgage current. For more details see Fannie Mae Lender Letter 2021-07, Freddie Mac Bulletin 2020-15, and Freddie Mac Bulletin 2021-6.
My mortgage is not government-backed. What protections do I have?
Some mortgage companies (also called mortgage servicers) are offering help to homeowners, even if their mortgage is not covered by the federal foreclosure moratorium and the forbearances for COVID-19 related hardships in the CARES Act. You should contact your mortgage company right away to talk about these options.
My mortgage is serviced by another mortgage company, like Wells Fargo, PHH, or some other company? What protections do I have?
Some mortgage companies (also called mortgage servicers) are offering help to homeowners, even if their mortgage is not covered by the 60-day foreclosure moratorium and the forbearances for COVID-19 related hardships in the CARES Act. You should contact your mortgage company right away to talk about these options.
Will my credit be hurt if I accept a forbearance or payment extension from my mortgage company?
Under the federal CARES Act, if you were current on your mortgage before January 31, 2020 and you get a forbearance or other form of relief that excuses you from making payments during the COVID-19 emergency, your mortgage company should continue to report you as current to the credit bureaus until 120 days after the end of the national emergency. (CARES Act § 4021.) Unlike some of the provisions of the CARES Act, this credit provision applies to ALL mortgages, not just federally-guaranteed mortgages. Note that if you were already behind on your mortgage as of January 31, 2020, the mortgage company can continue to report you as delinquent to the credit bureaus unless you bring your account current.
I have a reverse mortgage. How will the COVID-19 situation affect me?
The vast majority of reverse mortgages are insured by HUD, and thus are covered by the federal foreclosure moratorium through June 30, 2021. Lenders can’t file new foreclosures, pursue existing foreclosure cases, or schedule sheriff sales on these loans until after June 30. If you have a reverse mortgage in default for failure to pay taxes or insurance, or if you just inherited a house from someone with a reverse mortgage, you can request an extension of deadlines to cure the default or pay off the mortgage. You must contact the servicer to request the extension. For more details, see HUD Mortgagee Letter 2021-05.
What if my mortgage is already in foreclosure? How is this crisis affecting my court case?
Foreclosure cases against borrowers with government-backed mortgages (FHA, VA, USDA, Fannie Mae and Freddie Mac) that had already been filed when the pandemic hit in March 2020 should not move forward until after June 30, 2021. No one with a government-backed mortgage in foreclosure should face a sheriff sale date before July 2021. Borrowers with non-government backed mortgages do not have these protections and foreclosures may be filed and proceed against them.
However, in Philadelphia new residential foreclosure cases, and those that were in conciliation as of March 2020, cannot move forward until conciliation conferences start again. Those conferences have been suspended since March 2020. When conciliation conferences begin again, borrowers should get 30 days notice of their new conference date, and will be able to participate by phone. Philadelphia foreclosure cases may move forward against borrowers with non-government backed mortgages who are already past the conciliation conference stage, unless a forbearance or other agreement prevents it. All orders affecting foreclosure cases in the Philadelphia Court of Common Pleas can be found at https://www.courts.phila.gov/covid-19/ .
What if my property was scheduled for a sheriff sale?
All the Philadelphia sheriff sales from April 2020 through March 2021 have been postponed. Sales are scheduled to resume in April 2021. More detail about the postponements is available on CLS’s website here. Information about individual properties scheduled for sale is available on the Philadelphia Sheriff’s website here.
If you have a federally-backed mortgage (FHA, VA, USDA, reverse mortgage, Fannie Mae or Freddie Mac loan) the mortgage company is not allowed to schedule your home for a sheriff sale until after June 30, 2021.
I had a conciliation conference that got canceled because of the pandemic. What happens next?
All conciliation conferences in the Mortgage Foreclosure Diversion Program in City Hall Courtroom 676 have been on hold since March 2020. The conciliation program has not yet restarted. When it does restart, homeowners will be able to participate by phone. You will receive notice from the Court 30 days before any rescheduled conciliation conference. You can call your housing counselor or the Save Your Home Philly hotline at 215-334 HOME (4663) if you have questions about conciliation conferences.
My home was sold at sheriff sale but I am still living in it. How am I protected?
If you had an FHA or VA mortgage, HUD-insured reverse mortgage, or a Fannie Mae or Freddie Mac mortgage and your home was bought by the mortgage company at sheriff sale, you are also protected by the federal moratorium. The mortgage company (or bank) can’t take steps to evict you from the property, such as filing an ejectment action or having the sheriff remove you, until after June 30, 2021.
If your mortgage was NOT government-backed, the sheriff sale purchaser may file an ejectment case against you and if they obtain a judgment against you, they may be able to have the sheriff evict you. Pay attention to any court paperwork you receive. If you are still living in the property, the purchaser is not legally allowed to lock you out or do any “self help” eviction. Only the Philadelphia Sheriff’s office may legally evict you.
