Mortgage Foreclosure Moratorium Ends As Feds And State Ramp Up Program To Help Homeowners

PITTSBURGH (KDKA) - When the moratorium on evictions ended on July 31, so did a moratorium on foreclosures on delinquent home mortgages. Thousands of Pennsylvanians could be at risk of losing their homes.

Some 53 million Americans have borrowed money to buy a home, and some estimate that 20 percent of them have missed at least one mortgage payment during this pandemic.

"I think it's going to be very serious," says Dan Sullivan, a mortgage expert at Action Housing.

This weekend, a moratorium on foreclosures on federally-backed mortgages came to an end, and most local courts are expected to begin processing foreclosures in this region and elsewhere.

"I think we're going to be seeing maybe double the foreclosure filings that we typically see in a year once the courts are open and those COVID protections are ending," Sullivan told KDKA money editor Jon Delano on Monday.

Sullivan predicts a doubling of foreclosures in Allegheny County alone.

"On average, you get every year somewhere between 1,200 and 1,400 filings in Allegheny County. You're probably going to be looking at 3,000, if not more, towards the end of 2021 and 2022," said Sullivan.

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Attorney Catherine Martin with the local Neighborhood Legal Services says it's not too late for any homeowner to avoid foreclosure.

"The moratorium that was protecting the federally-backed loans ended July 31st, but that doesn't mean that everyone is endangered now. They still should 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, tell your bank you want a forbearance agreement, especially if you're one of the 70 percent of local homeowners with a government-backed mortgage.

"If you are a Fannie Mae, Freddie Mac or FHA mortgage product, you cannot foreclose if the homeowner has opted into a forbearance which is a mutually agreed to postponement of the mortgage payments," says Sullivan.

Payments are due eventually, which is why the $10 billion Homeowner Assistance Fund, or HAF, could be helpful.

"The federal government through the American Rescue Plan has the HAF, Homeowner Assistance Fund. Pennsylvania is going to receive $350 million and that money will be used to help homeowners who are struggling to pay their mortgage loans," says Martin.

In this state, the program is administered by the Pennsylvania Housing Finance Agency.

"It's $350 million over three years," says Scott Elliott, director of communications for the PHFA.

One glitch in this program, which will provide cash grants to homeowners, is that it is not yet set up here.

"If you can hang on for just two or three more months, the Homeowner Assistance Fund should be available," says Elliott.

Another option, says Elliott, is the state's Homeowners' Emergency Mortgage Assistance Program (HEMAP), loans to make your mortgage payments with a repayment schedule as low as $25 a month.

"HEMAP has been in place since the '80s. It's already there. So you don't need to panic. Look into HEMAP," says Elliott.

The PHFA and others also offer free counseling to all those unable to make their mortgage payments.