FEBRUARY 10, 2021 – The United States continues to reassess pandemic-related rules, executive orders and legislation. Many rules regarding business, commerce and even socialization have been created, dropped, changed and adapted. Among the many changes ongoing during the pandemic is a moratorium on foreclosures. The government has tried to protect homeowners through legislation and executive order, but the rules change frequently. Within the last week, rules have changed again, and the moratorium continues to prove volatile.
Because of the pandemic, the government enacted a moratorium on foreclosures. This protects homeowners from having their homes foreclosed upon if they fall behind in payments. There are caveats to this moratorium. First, it only applies to federally-backed mortgages. Qualifying loan types would include Freddie Mac, Fannie Mae, Federal Housing Administration, Department of Veterans Affairs and Department of Agriculture/Rural Housing Services loans.
The second caveat is that the moratorium will not last forever. It is currently extended until February 28, 2021. It is possible that this date will be extended again, but there are no guarantees on any extensions. Regardless, the general consensus is that the moratorium will end at some point in 2021.
Homeowners who are struggling to keep up with mortgage payments right now are short on options, and when the moratorium ends, it will not forgive debts. Instead, that will be a moment when many lenders move on foreclosure.
Louisiana is a judicial foreclosure state. This rule allows borrowers to contest foreclosure in court. While borrowers infrequently win these cases, the judicial process buys time to find a solution to foreclosure. Unfortunately for borrowers, the state of Louisiana allows for “confession of judgment” clauses in mortgages. These clauses allow lenders to skip the judicial process — shortening the time between a declaration of foreclosure to the auction of a person’s house to just 60 days.
Local real estate experts, such as Stephen Norton from Geaux Home Buyers, are trying to ensure that their fellow homeowners stay well-informed during this time. For many, the best way out of foreclosure is to sell their home. Selling a house before foreclosure finalizes saves a homeowner’s credit score from tanking, amongst other benefits.
Unfortunately, during this economic recession, it can be hard to find buyers. Many homeowners in Louisiana have the added difficulty of trying to sell homes that have incurred damage from Hurricane Laura. For these reasons, real estate investors such as Stephen Norton are emphasizing the fact that they provide guaranteed cash offers for houses, regardless of condition.
More information can be found at https://www.geauxhomebuyers.com/.
About Stephen Norton
Stephen Norton is an experienced real estate investor based out of Baton Rouge, LA. He established Geaux Home Buyers to provide solutions to local homeowners who find themselves in tough situations with few options.