COVID-19: Mortgage Payments and Foreclosures During the Pandemic

Call your mortgage servicer immediately. Your servicer is the company or bank you send your mortgage payments to every month. Do not just stop making payments without talking to them.

• FHA Mortgages: check with your servicer to see if your mortgage is still FHA insured. If it is, your servicer has to review your mortgage and your situation to see if there are short-term and/or long-term forbearance options. Forbearance means your full payments could be suspended. Another option might be a loan modification.

• Fannie Mae & Freddie Mac Mortgages: check with your servicer to see if your mortgage is with Fannie or Freddie. If it is, you can ask for a forbearance for up to 12 months, without piling up late fees.
  • Payments you can’t make during a Fannie or Freddie forbearance are not reported to credit bureaus
  • You don’t need to show proof of your hardship right now to get the forbearance
  • At the end of the forbearance period, your servicer has to work with you on a permanent solution like a loan modification.

• Private Bank Mortgages: Governor Walz's executive order asks banks to hold off on foreclosures caused by COVID-19. It also asks banks to not charge fees for late mortgage payments. BUT it is not an order. Contact your servicer immediately and ask for information and options directly from them.

Most servicers have added protections to help. Talk to your servicer and ask. Here are some examples:

• VA Mortgages: VA encourages servicers to suspend foreclosures for 60 days from March 18 – May 17, 2020.

• FHA Mortgages: starting or continuing foreclosures is suspended for 60 days from March 18 – May 17, 2020.

• Fannie Mae & Freddie Mac Mortgages: Foreclosure sales and related evictions are suspended for 60 days from March 18 – May 17, 2020.

• Private Bank Mortgages: contact your servicer or the foreclosing lawyer right away. Their contact information should be on any Notice of Foreclosure you got

Normally, not paying your property taxes or repayment plan can put you in danger of foreclosure. For reverse mortgages backed by the federal government and HUD, foreclosures are suspended for 60 days from March 18 – May 17, 2020. Most reverse mortgages are backed by the federal government and HUD.

You are ok during the peacetime emergency we are in. Governor Walz issued an executive order saying that “mortgage holders” (your servicer) can’t evict people from a foreclosed home after the redemption period ends.

A bank or servicer could still file the eviction, and it would show up on your record, but the courts aren’t scheduling eviction hearings during this peacetime emergency.

Governor Walz's order suspending evictions does apply to mobile home park lot rentals. This means that a park can’t evict you for not paying your lot rent.

BUT, the freeze on foreclosures does not yet apply to mobile or manufactured homes., This means if you are still buying the home, the seller can start a repossession action to take it back and force you out. This is true if you are buying the home from the mobile home park or somewhere else.

If you are buying your home from the park and can only pay for the home payment and not the rent, write clearly on your payment that the money is for the home payment and not the lot rent. If you pay in cash, give them a letter along with your payment saying that. Make sure it is on your receipt from them too.

Note: In order to repossess a manufactured home, a seller has to give 30 days’ notice before filing in court.