What to Expect When the Foreclosure Moratorium Ends in New York

Posted by Skyseoroundtable on January 27th, 2023

What to Expect When the Foreclosure Moratorium Ends in New York

If you are a homeowner in New York and are behind on your mortgage, there are some things to know about what may happen when New York’s Foreclosure Moratorium ends.

The federal foreclosure moratorium

As part of the CARES Act, the federal foreclosure moratorium was to help keep people from losing their homes in the middle of a pandemic. When the federal moratorium ended (July 31, 2021, with an extension to September 30 for those with a federally protected mortgage) Several states, including New York, stepped in with foreclosure moratoriums of their own. 

New York’s foreclosure moratorium end date

Unless there is yet another extension, New York State’s foreclosure moratorium will be ending on January 15, 2022. What happens after that deadline remains to be seen. However, we can look at other states that have ended their foreclosure moratoriums and get an idea of what we can expect.

What’s happening in other states

Based on reports from this October by RealtyTrac, Illinois, Florida, and New Jersey, have the highest rates of foreclosure. Florida did not have a state-wide foreclosure moratorium. Illinois did, and it expired on October 3^rd. New Jersey’s moratorium expired on November 15^th.

While it seems odd that two states that had foreclosure moratoriums in place have such a high foreclosure rate, remember that these moratoriums were for people directly affected by COVID. Any other reasons to foreclose on a property were still valid, even in the middle of the pandemic. Also something else to take into account…

“As expected, now that the moratorium has been over for three months, foreclosure activity continues to increase,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM company. “But it’s increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans that were in foreclosure prior to the pandemic.” Click here to read the entire report -  https://www.attomdata.com/news/market-trends/foreclosures/attom-october-2021-u-s-foreclosure-market-report/

The states with the lowest foreclosure rates were South Dakota, West Virginia, and Montana – none of which had a statewide moratorium in place.

While foreclosure rates are rising across the country, it is increasing slower than initially feared. It appears a combination of lenders working with their customers, and various state-level grants, are helping slow foreclosures down.

What to expect in New York

New York State has had the longest foreclosure moratorium in the country – but all good things come to and end. If your mortgage was in forbearance prior to the pandemic, you will probably be in the first wave of foreclosures once the state moratorium ends. But even then, you may have some breathing room. New York state usually has a rather long time line for processing foreclosures through the system, averaging over 400 days https://www.ny-bankruptcy.com/what-to-expect-in-a-ny-foreclosure-case-how-long-will-it-take-to-resolve/. However, with a two year long back up currently in the courts, not to mention personnel shortages at many financial institutions, the timeline from first filing to judgement may be much, much longer.

What to do if you feel your home is in danger of foreclosing

Since there are so many variables, the best option you have is to contact a lawyer experienced with foreclosure defense, distressed mortgages, mortgage modifications, short sales, foreclosure avoidance, and negotiation/debt settlement.

Reach out to New York attorney Ronald D. Weiss, P.C. for a free consultation. He can guide you through the available options for your specific needs. Working together, you can find the right choice. Ron can get the process started and will be at your side the whole time. Call 631-271-3737 and take the first step to a fresh start.