How COVID-19 Changed Foreclosure Rules—and What Still Applies Today
How COVID-19 Changed Foreclosure Rules, Understanding Pandemic-Era Protections and Their Lasting Effects
The COVID-19 pandemic upended lives and economies across the globe—and the U.S. housing market was no exception. As millions of Americans faced job losses and financial uncertainty, emergency measures were introduced to prevent a wave of home foreclosures.
From federally mandated forbearance programs to foreclosure moratoriums, the response to COVID-19 marked a historic shift in housing protections. But what happened after those programs ended? And what rules still impact foreclosure today?
This post explores how COVID-19 Changed Foreclosure Rules, what protections have expired, and which long-term changes homeowners should still be aware of.
The Housing Crisis That Could Have Been
In early 2020, as COVID-19 shut down businesses and disrupted income for millions, fears of a mass foreclosure crisis loomed. The situation echoed the 2008 housing crash—but this time, the government responded quickly and decisively.
In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which offered unprecedented relief to struggling homeowners. This included:
- A federal foreclosure moratorium for government-backed mortgages
- Forbearance rights for up to 18 months
- Easier access to loan modifications
These protections applied to loans backed by Fannie Mae, Freddie Mac, the FHA, VA, and USDA—covering roughly 70% of all U.S. mortgages.
Key COVID-Era Foreclosure Protections
1. Foreclosure Moratoriums
From March 2020 through July 2021, servicers of federally backed loans were prohibited from initiating or finalizing foreclosure proceedings. This moratorium protected millions of homeowners from losing their homes while unemployment soared.
2. Forbearance Programs
The CARES Act gave borrowers the right to request forbearance for up to 180 days, with the option to extend another 180 days. Many agencies later extended total eligibility to up to 18 months.
Key points:
- No documentation was required—borrowers could simply claim COVID-related hardship
- No additional fees or penalties accrued
- Missed payments weren’t forgiven—but could be deferred or repaid through new arrangements
3. Credit Protection Rules
The CARES Act also prohibited negative credit reporting during active forbearance. If your mortgage was current before forbearance, your credit had to remain marked as current.
What Has Ended?
Most of the emergency foreclosure protections expired by mid-2021. Specifically:
- The federal foreclosure moratorium ended on July 31, 2021
- Forbearance application deadlines for many federally backed loans ended by September 2021, although some servicers continued accepting requests voluntarily
- Special pandemic-era reporting and documentation rules have mostly reverted to pre-COVID standards
However, some states introduced their own foreclosure protections that lasted longer. For example, California and New York added state-level moratoriums or additional forbearance programs.
What Foreclosure Rules Still Apply Today?
Although most emergency measures have ended, several long-term changes—and ongoing supports—remain.
1. Post-Forbearance Options Are Still Available
If you were in forbearance during COVID-19, you may still have access to flexible repayment options, such as:
- Deferral of missed payments to the end of your loan term
- Loan modification to reduce payments or change terms
- Partial claims through FHA (a second lien paid later)
Even if your forbearance period ended, your servicer is still required to evaluate you for these options before beginning foreclosure.
2. Expanded Loss Mitigation Policies Remain in Place
Most government agencies now permanently offer streamlined loss mitigation policies inspired by pandemic programs. These include:
- Flex Modification Programs for Fannie Mae/Freddie Mac
- COVID-19 Recovery Options through FHA, including the COVID-19 Advance Loan Modification
- VA’s updated Loan Deferment and Repayment Flexibility
These rules help borrowers recover from hardship—even if it’s not COVID-related.
3. Borrower Contact Rules Are Stricter
Servicers must still make reasonable efforts to contact borrowers before starting foreclosure, especially if the loan is federally backed. This includes:
- Explaining available relief options
- Offering an opportunity to apply for assistance
- Reviewing any loss mitigation application in good faith
This rule ensures that foreclosure isn’t the first or only option on the table.
State-Level Protections Still Exist in Some Areas
While federal pandemic rules have expired, some states have passed or retained their own homeowner protections. Examples include:
- California’s Homeowner Bill of Rights, which requires servicers to consider alternatives before foreclosure
- New York’s foreclosure prevention outreach requirements, including mandatory contact and notice periods
- Washington State’s Foreclosure Fairness Act, requiring mediation before foreclosure
Be sure to check your state’s foreclosure laws—many COVID-era policies were adapted into ongoing local rules.
What if You’re Still Struggling?
If you’re behind on your mortgage now—even if it’s not COVID-related—you may still qualify for:
- Standard forbearance due to hardship
- Loan modification based on income or expenses
- State or nonprofit housing assistance grants
- Help from a HUD-approved housing counselor
Lenders are still encouraged to work with borrowers and offer loss mitigation alternatives before pursuing foreclosure.
How to Avoid Foreclosure in 2025 and Beyond
While the crisis of 2020–2021 is behind us, many homeowners continue to face financial difficulties. Here are a few tips to protect yourself and your home:
✅ Contact Your Lender Early
If you anticipate trouble making payments, call your loan servicer immediately. The earlier you act, the more options are available.
✅ Document Your Hardship
Gather proof of your income, expenses, and any change in circumstances. This will help your lender or counselor assess your eligibility for relief.
✅ Explore Government and Nonprofit Help
Check programs through:
- HUD (hud.gov/housingcounseling)
- State housing agencies
- Local legal aid groups
✅ Understand Your Rights
Use resources like homeforeclosuretermsglossary.com to learn the terms and legal protections involved in foreclosure.
How COVID-19 Changed Foreclosure Rules: Final Thoughts
The COVID-19 pandemic changed the way the U.S. deals with foreclosure—possibly forever. While most emergency rules have ended, their impact lives on through better loss mitigation tools, increased borrower protections, and more awareness of homeowner rights.
If you’re struggling with mortgage payments today, you’re not alone—and you may still have time and options to save your home.
Stay informed. Speak up early. And always seek help before it’s too late.