Paying Your Mortgage and Foreclosures During the COVID-19 Coronavirus Crisis

Everyone should ask their lender for a “forbearance.” That is the term used when a lender agrees to put off until later the payments due on your mortgage. Many lenders are helping homeowners during this time.  

If your mortgage has federally backed financing from Fannie Mae, Freddie Mac, USDA, VA or FHA, you should be able to get a no-interest, no-fee COVID-19 forbearance if you are experiencing a hardship. Those months of payments will either be added to the end of your mortgage or you might qualify for some other option to lower your payments after the end of the forbearance if you still can’t afford your regular payments. 

Some lenders may ask you to request the forbearance every three to six months along the way to verify that you still have a financial hardship.

For Fannie Mae and Freddie Mac loans:

• Generally, borrowers are entitled to COVID-19 forbearances of up to 12 months.
• But there is an extended forbearance of six additional months (in three-month increments) for anyone who requested their initial forbearance by February 28, 2021.
• There is no deadline to request your initial COVID-19 forbearance.

For FHA, VA and USDA loans:

• Generally, borrowers are entitled to COVID-19 forbearances of up to 12 months.
• But there is an extended forbearance of six additional months (in three-month increments) for anyone who requested their initial forbearance before June 30, 2020.
• You must request your initial COVID-19 forbearance before June 30, 2021.

If you do not have a federally backed mortgage:

Contact your mortgage servicer / lender. Ask if you can get more time to pay. Be sure to ask:

• if you will be charged late fees, penalties or interest

• if postponed payments will be recorded in your credit report

• if you need to send any documents to show you are experiencing hardship due to the COVID-19 crisis.

Starting May 3, 2021, Vermont Housing Finance Agency (VHFA) accepts applications for the second round of the Vermont COVID Emergency Mortgage Assistance Program (MAP).  It helps Vermont homeowners who faced economic hardship because of the COVID-19 pandemic.

This program is available to Vermonters with mortgage payments on their primary residence who meet the income requirements. You don’t need to have a VHFA mortgage. The program only helps people with mortgages created before March 1, 2020.

The program could pay up to 12 months of missed mortgage payments.

If you have a mortgage and you have past-due property taxes, you can apply for money to pay up to 12 months of past-due property taxes.

If you applied before, or received MAP help before, you can still apply for this new round of help. If you got a mortgage forbearance (postponement), apply today to get help before the forbearance expires.

To be eligible, your adjusted gross income cannot be more than $84,000 in 2020 or up to $21,000 total income in the last 90 days. For homeowners in Chittenden County the limit is $96,000 in 2020 or $24,000 in the last 90 days.

If you own a mobile home and have a loan on it, you may be eligible as well. (You may also be able to get help with past-due lot rental payments through the Vermont Emergency Rental Assistance Program (VERAP) program).

Before you can get mortgage assistance payments, VHFA will talk to your mortgage servicer about your mortgage debt. You can make sure that VHFA has the right contact information by calling your servicer and asking for the name and telephone number of the person VHFA should call about your mortgage. You can also send a Request for Information letter to your loan servicer, asking for contact information and giving your loan servicer permission to call VHFA directly to talk about your mortgage. Use our sample Request for Information letter.

If you need help applying for MAP, contact:

• VHFA Mortgage Assistance Progam: Email: MortgageAssistance@vhfa.org Phone: 802-652-3421; Toll-free: 1-888-714-2260
• Vermont HomeOwnership Centers
• Vermont Center for Independent Living (VCIL)
• AALV (resources for New Americans, including translation help)

For more information about the program and to apply, see VHFA’s Vermont COVID Mortgage Assistance Program website.

If you have a mortgage and you pay property taxes, you can apply for help paying your past-due property taxes that were due on or after March 1, 2020.

Learn more above, or at the Vermont COVID Emergency Mortgage Assistance Program (MAP) website.

If your mortgage has federally backed financing from Fannie Mae, Freddie Mac, USDA, FHA or VA, the lender: 

• Won’t file a foreclosure between March 18, 2020, and June 30, 2021 (see above).
• Can’t file a foreclosure if you ask for and get a “forbearance.” This means the lender is not going to go after your mortgage payment now, but will add it to the end of your mortgage. 

If you have a federally backed mortgage, and a foreclosure case was filed in court when it should not have been, you can file a motion to dismiss that foreclosure case. 

If your mortgage is not federally backed, and you are more than 120 days delinquent (past due), your lender can file a foreclosure.

When you are served with a Summons and Complaint for a foreclosure lawsuit, it is important to talk to a lawyer right away. Fill out our form and we will call you back. Your information will be sent to Legal Services Vermont. You can also call us at 1-800-889-2047. We can give you quick advice or possibly a referral to a lawyer.

You should file an Answer. You can use our Answer form. The only difference is your signature on the Answer doesn’t have to be notarized, instead it must say: “I declare that the above statement is true and accurate to the best of my knowledge and belief. I understand that it the above statement is false, I will be subject to the penalty of perjury or other sanctions in the discretion of the court.”

What will happen to the foreclosure case filed against me in court? 

If you live in the mortgaged property, the foreclosures is “stayed” (paused). That means the lender and the court can’t take further steps. Also, the redemption period is paused. The case will remain stayed until 30 days after the governor declares the State of Emergency is ended.

If no one lives in the property, the foreclosure action can go forward. 

If the State of Emergency is in effect, the execution date of the Writ is paused or “stayed.” It will need to be served again once the governor lifts the State of Emergency by declaration.

You can file a motion to stay the Writ of Possession. Here are some reasons you can ask for the Writ of Possession to be stayed (paused): 

• You are getting a forbearance from your lender. 
• You will be able to reinstate your mortgage as soon as you get assistance from the state. 
• You have a medically vulnerable person in your household, and it is not safe to try to find another place to live. 

Contact us and we will help you file a motion to stay the Writ of Possession. 

1. Your local Housing Retention Counselor (HRC) can help. They can: 

• help you assess your current housing situation and needs 
• provide delinquency and foreclosure assistance 
• help you understand the foreclosure process to better navigate a successful outcome, or 
• help you work with your loan servicer on a repayment plan or viable workout option. 

Where you live will influence which Homeownership Center can help you. Follow this link to see which Homeownership Center covers your region. 

2. If you are having mortgage payment issues or are in foreclosure on your primary residence, contact us at Legal Services Vermont and Vermont Legal Aid. Fill out our form and we will call you back. You can also call us at 1-800-889-2047. We can give you quick advice or possibly a referral to a lawyer.