How to Manage Preforeclosure in the Age of COVID-19

 Posted on December 28,2020 in Mortgage Foreclosure

While the mortgage, rent, and income protections provided for in last spring’s original Coronavirus Aid, Relief, and Economic Security (CARES) Act have long since been exhausted, many states, including Illinois, have continued to offer their own executive orders and legislation to assist residents during this unprecedented time. In addition, many mortgage companies have developed their own programs for homeowners to help them avoid foreclosure, at least for the time being. However, that is not to say if you are looking to eventually collect on the debts owed from these properties that might be in preforeclosure, you should not be prepared to take action. Foreclosure debt collection will be inevitable post-pandemic, despite the latest COVID relief package being signed into law. In that sense, you, as a mortgage lender or servicer who deals with foreclosures, must remain focused on your job, collecting and documenting everything necessary to make the preforeclosure and foreclosure processes go smoothly whenever the time comes.

Advice to Mortgage Lenders When Prepping for Foreclosure During the Pandemic

With the vaccines only starting to be administered and with the latest COVID-19 economic relief bill signed into law nine months after the CARES Act, you cannot expect things to get back to normal immediately. Therefore, the negative impact of COVID-19 on the economy, including housing, will persist far into 2021. Due to this, you need to be prepared for continual increases in foreclosures, including from residents of normally good standing with your mortgage lending or servicing company. To better prepare for an influx of foreclosures in the new year, consider the following tips:

1. Be compassionate and polite, but still do your job and do so in painstaking detail. While this might seem like a difficult balance to strike, it is possible, especially if your company already offers disaster forbearance programs for homeowners. You should listen to your customer’s concerns, offer options to help them keep their house, clearly explain everything, and document all your correspondence with them. This includes keeping track of:

1. Any notices of enrollment in COVID relief forbearance programs

2. Any plans that were not adhered to

3. Any other demand letters

4. A running tally of what is due to your company as a result of the delinquency

No matter how difficult a foreclosure or even a preforeclosure might be during a public health emergency such as COVID-19, you must still do your due diligence and take comprehensive, detailed notes, documenting and recording everything you can about each account. If you do this, your debt collection attorney will be more successful in recovering what is owed to you.

2. Understand that you are not the enemy. The sooner you can convince yourself of this, the sooner homeowners will understand it as well, making them more willing to comply with any legal actions you must inevitably take.

3. Do not let your emotions get the better of you. It might be easy to let certain infractions slide or neglect to include certain documentation with your complaint simply because you feel sorry for those being foreclosed on. However, remaining level-headed and doing what needs to be done is the best course of action.

Contact a Chicago Foreclosure Debt Collection Lawyer

During these desperate and trying times, collecting on debts, especially mortgage debts, can be a fearsome proposition. No one wants to be like the Grinch this holiday season, and no one wants to evict someone next year amidst a pandemic. Regardless, you must do your job and, if legal action is necessary, contact an experienced Chicago foreclosure recovery attorney at 312-704-0771. The talented team at Dimand Walinski Law Offices, P.C., has 40 years of experience with these types of cases and knows how to handle them, even in the most extenuating of circumstances, such as a global health crisis.

Sources:

https://money.com/pandemic-eviction-foreclosure-moratoriums-state-by-state/

https://wolfstreet.com/2020/07/14/it-starts-mortgage-delinquencies-suddenly-soar-at-record-pace/

https://ca.finance.yahoo.com/news/renters-homeowners-face-new-phase-of-coronavirus-crisis-evictions-172940378.html

https://www.nclc.org/issues/foreclosures-and-mortgages/covid-19-state-foreclosure-moratoriums-and-stays.html?print=pdf

https://www.perkinscoie.com/en/news-insights/covid-19-related-eviction-and-foreclosure-ordersguidance-50-state-tracker.html#illinois