Hoosiers are struggling to overcome numerous obstacles in 2020. The global pandemic is frightening by itself, but its effects bring a host of other problems that further complicate our lives. Time off work or job loss resulting from quarantines or business closures have people digging deep to make ends meet. While federal and state protections prevent many new foreclosures through the spring and summer, many fear the number of foreclosures in Indiana could jump dramatically when those protections are removed. If you’ve missed payments, read on to learn about general and pandemic mortgage relief options.
Options to Avoid Foreclosures in Indiana
Even before the pandemic, Indiana foreclosure laws and programs have provided relief and access to services to help Hoosiers avoid or manage the foreclosure process in Indiana. The upheaval created by the coronavirus pandemic has added to that arsenal, although relief is only temporary in some cases. To best protect your home and credit, you need to become acquainted with the temporary protections against foreclosure for the short term and the resources for avoiding foreclosure generally. When foreclosure is unavoidable, there are alternatives to help protect your credit for future housing options.
Federal and State Pandemic Mortgage Relief Options
In early 2020, the federal government anticipated the pandemic fallout on homeowners. The US Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which offered various types of relief to US businesses and individuals. To help stave off a wave foreclosures and a housing crisis, the CARES Act allows any homeowner with a federally backed mortgage to enter into a forbearance agreement to pause the obligation to make mortgage payments. Generally, payments not made pursuant to a forbearance agreement are not forgiven but are added to the end of the loan term. Federally backed mortgages include those sponsored by the following:
- The Federal Housing Administration (FHA);
- The Federal National Mortgage Association (Fannie Mae);
- The Federal Home Loan Mortgage Corporation (Freddie Mac);
- The United States Department of Agriculture (USDA loan); or
- The United States Department of Veterans Affairs (VA loan).
Through August 31, 2020, the CARES Act also prohibits lenders from beginning foreclosure proceedings, finalizing foreclosure judgments, or holding sheriff’s sales involving government-backed loans.
The State of Indiana also extended certain protections as a result of the pandemic. On March 19, the governor signed Executive Order 20-6, which prohibited evictions and foreclosure in Indiana during the state’s public health emergency, although it did not relieve borrowers from making payments. Subsequent executive orders extended the public emergency—and the related pandemic mortgage relief options—to August 3, 2020.
Efforts to Prevent Foreclosures in Indiana
Even before the pandemic, the foreclosure crisis from 2007 to 2010 prompted many states to put foreclosure protections in place. Indiana was among them. One of Indiana’s efforts was the creation of the Indiana Foreclosure Prevention Network, which offers assistance to mortgage loan borrowers in financial straits. A public-private partnership, the service provides free budgeting counseling to residential borrowers by phone or in person with a certified foreclosure intervention specialist, and eligible borrowers may obtain a loan from Indiana’s Hardest Hit Fund.
Additionally, Indiana foreclosure laws entitle residential borrowers to a pre-suit settlement conference (before the foreclosure action is filed). The Indiana Supreme Court also established the Mortgage Foreclosure Trial Court Assistance Project (MFTCAP) to facilitate settlement conferences during foreclosure proceedings. Once the borrower requests and obtains settlement conference approval by the court in the foreclosure action, the settlement conference will be scheduled and moderated by a facilitator, allowing the borrower to negotiate a foreclosure alternative. Foreclosure alternatives include loan modification, a short sale (selling the property for less than owed), or tendering a deed in lieu of foreclosure (handing the property over to the bank).
How Mortgage Relief Attorneys Help Borrowers in Foreclosures in Indiana
Navigating foreclosure and foreclosure alternatives is difficult. If you’re struggling to make mortgage payments and worried about foreclosure, the first step is to take advantage of Indiana foreclosure laws and the free services to protect borrowers that are noted above. The next step is to consult a mortgage relief attorney, especially if a foreclosure action has been or will soon be filed against you.
At Camden & Meridew, P.C., our real estate department has extensive experience helping borrowers understand their options and dealing with foreclosures in Indiana. Don’t delay in getting help. For experienced mortgage relief attorneys in Fishers and serving the greater Indianapolis area, call us today at 317-770-0000 or complete this online contact form.