The Covid-19 Pandemic and Foreclosure

Covid-19 Pandemic and Foreclosure

The Great Recession of 2008 wreaked havoc on homeowners who could not afford to pay their mortgage. Maryland was among the top three states affected. Prior to the Covid-19 Pandemic, Maryland still ranks among the top three states in the amount of foreclosures per capita. Lessons from the Great Recession can teach us what servicer scams to avoid.

Before the Covid-19 Pandemic, Maryland ranked among the top three states in the amount of foreclosures per capita

Many people were eventually able to keep their homes as a result of the Making Home Affordable program. However, MHA reached its sunset and is no longer available. Private variations of mortgage modification programs do not come close to meeting the needs of homeowners in 2020. The issue now facing Maryland homeowners is what type of relief is available to Maryland homeowners.

Unlike the Great Recession where the underpinnings that caused the crash were years in the making, the Covid-19 Pandemic was only months and days in the making. The Families First Coronavirus Response Act (H.R. 6201) was introduced in the House of Representatives on March 11, 2020. The House passed the bill at 1:00 AM on Saturday, March 14, 2020. Click here for features of the bill. The House made no changes to the bill and members of the House did not have time to read and digest the bill.

While the Covid-19 Pandemis will affect all Americans, the fallout from efforts to stem the spread has affected the majority of Americans. The Covid-19 Pandemic will severly affect those who do not have either large amounts of equity in their property, or do not have liquid assets. Unlike 2008, the current problem is neither fueled by sub-prime mortgages or adjusting interest rates. Similar to 2008, banks will spend millions of dollars advertising their virtues as opposed to getting to know the people they serve. Regardless, lessons from the Great Recession can teach us what servicer scams to avoid

The best course of action right now is to protect yourself and seniors from getting the virus. Don’t panic regarding the mortgage issue. Read later blogs about options available for federally backed mortgages here. You should also read the latest option available to you here.

Be safe, Jerry Solomon