Can The Government Stop Lender Foreclosures?
Foreclosure moratoriums have probably been more common then most people realize — and more discomforting than lenders would like. As examples:
*Lee J. Alston, in Farm Foreclosures in the United States During the Interwar Period, says farm foreclosures were banned in 26 states during the Depression years.
*During the 1980s the Farmers Home Administration created foreclosure moratoriums.
*Active duty military personal generally cannot be foreclosed under the Soldiers’ and Sailors’ Relief Act of 1940.
*A number of states have enacted foreclosure moratoriums. As one example, Maryland added 135 days to the foreclosure process starting in 2008, not a moratorium in the usual sense but an effective stall for troubled borrowers.
*The Supreme Court ruled in the 1934 Blaisdell decision that states can stop foreclosures.
*It’s a common practice to suspend foreclosures in presidentially-declared disaster areas.
*At the end of 2008, both Fannie Mae and Freddie Mac suspended foreclosure activities nationwide through the end of January 2009.
Foreclosure moratoriums raise several important questions:
First, what happens after the moratorium ends? Is the missed payment or payments added to the loan? Due immediately? Forgiven?
Second, is the lender making negative reports to credit bureaus? (Usually not, but ask.)
Third, when is your next payment due?
If you may qualify under a moratorium you must contact your lender to confirm. Do NOT assume that a payment can be skipped. Take notes and record who you spoke with and when. Get the lender representative’s direct phone number and email address. For additional help, speak with an attorney or community housing organization.
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Syndicated originally by Content That Works and posted with permission.
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