The federal moratorium on foreclosures has ended, meaning that banks and other lenders and lender servicing organizations can resume foreclosing on homeowners who are behind in payments.
However, residents of the greater Detroit area should know that the federal Consumer Financial Protection Bureau, or CPFB, has issued rules affording some homeowners in distress with transitional relief even though the moratorium has ended.
These rules are supposed to prevent a flood of foreclosures hitting the market at the same time, and they also are supposed to protect people from the hardship of suddenly facing a foreclosure proceeding.
Lenders are supposed to have time to know and exercise their alternatives
With the new rules in place, most borrowers will have the benefit of receiving notice of their available alternatives and some reasonable time to pursue them. These alternatives include both deferring missed payments to the end of the term of the mortgage and modifications.
In some cases, the borrower may be able to qualify for a special loan modification on terms that are supposed to be manageable for the customers and efficient for mortgage lenders to execute.
Not every borrower qualifies for these benefits.
For example, people who were four months or more behind in mortgage payments as of March 2020 or who later fall this far behind and do not respond to an offer of alternatives may face foreclosure.
Likewise, people who have simply left their home empty or who have been properly considered and then rejected for alternatives to foreclosure may also risk ultimately losing their homes.
People who are interested in these options or other alternatives to foreclosure should consider speaking with an experienced attorney to evaluate their legal options.