Foreclosure and Consumer Protection During the Coronavirus Crisis

Foreclosure and Consumer Protection During the Coronavirus CrisisAlong with the rest of the world, Americans are currently facing the coronavirus (COVID-19) pandemic. More and more people are being instructed to remain at home and avoid close contact with others. While necessary to prevent the spread of the virus, social distancing is having an incredibly negative impact on the economy.

In an attempt to contain COVID-19, officials in many areas have ordered nonessential businesses to close. Many other companies have made the decision to close on their own. As a result, an unprecedented number of workers are being laid off and unemployment rates are steadily increasing. In fact, the U.S. Secretary of Treasury recently stated that national unemployment rates could rise to 20% without an economic stimulus package, and the Federal Reserve has warned that unemployment could reach 30% in the second quarter of 2020 (compare that to the employment rate during the Great Depression, which was 25% at its peak).

If you own a home, you may be concerned about whether you’ll be able to keep up with your mortgage payments during this tumultuous time. Although you should strongly consider meeting with an attorney to discuss your options, here are some helpful resources regarding foreclosure and consumer protection in the time of the coronavirus pandemic.

What Is Foreclosure?

When a homeowner stops making the agreed-upon mortgage payments, the mortgage lender can foreclose on the property by repossessing it and selling it at a public auction. Foreclosure laws vary from state to state. Florida, for example, is a judicial foreclosure jurisdiction, meaning that foreclosures must go through the court system.

Foreclosure During the Coronavirus Crisis

In response to the coronavirus outbreak, the federal government (more specifically, the Department of Housing and Urban Development and the Federal Housing Administration) has enacted a temporary freeze on foreclosures and evictions for many homeowners, which may be extended further into the future. Various state and local courts have also suspended trials, foreclosure sales, and evictions for the time being. A foreclosure defense attorney can let you know whether your mortgage qualifies for this type of relief and recommend which steps to take next to ensure that your rights are protected.

What Is Consumer Protection?

There are various federal and state laws designed to protect consumers’ rights. With regard to foreclosures, consumer protection laws protect homeowners from improper debt collection practices and ensure that they receive adequate assistance.

For example, under federal law, once a homeowner has fallen behind on his or her mortgage payments, the mortgage servicer is required to provide information about potential loss-mitigation options. These might include temporary forbearance, a loan modification, a short sale, or a deed in lieu of foreclosure. If the homeowner makes a timely request for mortgage assistance, the servicer is not permitted to continue pursuing the foreclosure while simultaneously evaluating the request for assistance (referred to as “dual tracking”).

Consumer Protection During the Coronavirus Crisis

The Federal Deposit Insurance Corporation (FDIC) recently encouraged banks and other financial institutions to provide relief for customers during the ongoing pandemic. This could potentially include waiving fees for late or missed payments, and waiving penalties for early withdrawals from CDs. Congress is also considering various bills designed to protect consumers experiencing financial hardships due to the coronavirus, such as the Disaster Protection for All Workers’ Credit Act, which would temporarily suspend negative credit reporting. A consumer protection attorney can advise you on how to take advantage of protections like these.

Experienced Foreclosure Defense & Consumer Protection Attorneys in Tampa Bay

If you’re concerned about your house getting foreclosed upon as a result of the coronavirus crisis, or if you’re dealing with harassment from debt collectors, you can turn to the knowledgeable and compassionate attorneys at The Lyons Law Group, P.A. We’re a full-service real estate law firm that’s been serving clients since 2008, and our attorneys possess the skills and experience needed to guide you through this stressful time.

Contact us today to schedule a free initial consultation. Our office is located in New Port Richey, Florida, and we’d be happy to arrange an appointment at a date and time that’s convenient for you.

April 01, 2020

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