PITTSBURGH (KDKA) – When the eviction moratorium ended on July 31, a moratorium on foreclosures on defaulting mortgage loans also ended. Thousands of Pennsylvanians could lose their homes.
About 53 million Americans have borrowed money to buy a home, and some estimate that 20 percent of them missed at least one mortgage payment during this pandemic.
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“I think this is going to be very serious,” says Dan Sullivan, mortgage expert at Action Housing.
A moratorium on federal mortgage foreclosures ended this weekend and most local courts are expected to begin processing foreclosures in this region and elsewhere.
“I think we will maybe file twice as many foreclosure requests that we normally see in a year once the courts are open and this COVID protection ends,” Sullivan told KDKA money editor Jon Delano on Monday.
Sullivan predicts foreclosures will double in Allegheny County alone.
“On average, there are between 1,200 and 1,400 registrations in Allegheny County each year. By late 2021 and 2022 you will likely be looking at 3,000, if not more, ”Sullivan said.
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Attorney Catherine Martin of the local neighborhood legal service says it is not too late for any homeowner to avoid foreclosure.
“The moratorium protecting federal loans ended on July 31, but that doesn’t mean everyone is at risk now. You should still seek help, ”says Martin.
While local mortgage experts say more lending institutions will file foreclosures, there are steps homeowners can take to keep their homes.
First, let your bank know that you want a forbearance arrangement, especially if you are among the 70 percent of local homeowners with a government-supported mortgage.
“If you are a Fannie Mae, Freddie Mac, or FHA mortgage product, you cannot foreclose if the homeowner has opted for a forbearance that is an amicable deferment of mortgage payments,” says Sullivan.
Payments are due eventually, which is why the $ 10 billion Homeowner Assistance Fund (HAF) could help.
“The federal government has the American Rescue Plan through the HAF, the Homeowner Assistance Fund. Pennsylvania is receiving $ 350 million and that money will be used to help homeowners struggling to pay their mortgage loans, “says Martin.
In that state, the program is administered by the Pennsylvania Housing Finance Agency.
“That’s $ 350 million over three years,” said Scott Elliott, PHFA communications director.
One flaw in this program that gives homeowners cash grants is that it’s not yet set up here.
“If you can only hold out two or three more months, the Homeowner Assistance Fund should be available,” says Elliott.
Another option, Elliott says, is the government’s Emergency Home Aid Program (HEMAP), loans to make your mortgage payments with a repayment schedule of just $ 25 per month.
“HEMAP has been around since the 1980s. It is already here. So don’t panic. Take a look at HEMAP, ”says Elliott.
The PHFA and others also offer free advice to those who cannot make their mortgage payments.