With COVID in rearview, what about foreclosures?

State, federal laws have helped so far, but the moratorium can't last forever


Alexis Lorenzo is scrambling.

So far, many have held onto their homes — even if they can’t pay — thanks to foreclosure moratoriums enacted at the height of the coronavirus pandemic. But as COVID-19 slowly disappears, so are the days remaining for these protections to stay in place.

It’s almost impossible to tell what will happen when these moratoriums are finally lifted, but Lorenzo — the director of foreclosure prevention at Bronx Legal Services — is standing by ready to help. And that help could be needed as early as this summer.

“Usually homeowners get to advocates and legal experts after already being fleeced a couple of times by bad actors,” Lorenzo said. And she’s not referring to the government or even banks — instead those people taking the little that’s left in some homeowners’ bank accounts, leading them to believe they can help.

Instead, Lorenzo said, they “do bad things” like “filing documents that sign over the deeds to their house to predators.”

Preparing homeowners for the expected wave of foreclosures is no easy task — even for legal experts with experience taking on these very kinds of legal housing issues.

Lorenzo and Bronx Legal Services are working with a consortium of advocates, non-profits and city agencies to help many who may be most vulnerable to foreclosures once the moratoriums are lifted. In fact, they’ve created what they call the Anti-Displacement Homeowner Help Desk, a new initiative designed to educate homeowners on how they can protect their homes from anyone who threatens them, especially predators.

The program also provides foreclosure prevention resources while holding workshops to inform homeowners of their rights while connecting them with the experienced legal advocates they need.

The initiative not only educates homeowners, but virtually anyone asking housing advocates for help.

“What we’re doing is, in some space, try to educate those folks so they could recognize the issues that when there is predatory behavior, they can direct the homeowner to us,” Lorenzo said.

One problem some homeowners seem to struggle with is negotiating with forbearance servicers — those who are supposed to help people behind on payments catch up — who are reluctant to cut a deal with them.

“They can get in contact with an experienced advocate that will get on the phone with the servicer and things usually change,” Lorenzo said.

Homeowners often don’t have a direct path to experts who can assist them. Instead, they turn to someone they trust in their community like a clergy member, Lorenzo said, explaining their problems in the hopes of finding somewhere to go for help.

Since the beginning of the coronavirus pandemic, it’s been projected more than a half-million New York homeowners were delinquent on their mortgages and risk being evicted by the bank, according to census data.

Some key neighborhoods in the city projected to being at risk of mass predatory foreclosures, Lorenzo said, include Central Brooklyn, southeast Queens, and the northern Bronx.

Her initiative focuses on these specific parts of the city. 

In fact, during an online class held just last week, experts from Legal Services NYC covered a bevy of topics such as a first-time homebuyer’s education program, credit coaching, foreclosures, scams and deed thefts.

One takeaway from the class, however, was the clear warning to be wary of anyone you’re not familiar with offering some help.   

“Call a housing counselor or legal service provider,” said Alex Knipenberg, a staff attorney at Brooklyn Legal Services.

“Scams are very important, because nowadays, home values have been going up a lot. A lot of properties are being targeted by different scammers trying to steal deeds and equity.”

The coalition is expanding beyond the classes and even the help desk to partner with the state attorney general’s office and the city’s housing preservation and development department to help homeowners connect with free housing experts specializing in home repairs, financial counseling, mortgage modifications, forbearance servicer requests, and home loan refinancing.

Homeowners also can find free legal service providers through the initiative who can lend their assistance on predatory scams that result in equity and deed theft among other foreclosure issues.

The federal government recently extended the foreclosure moratorium on homes with federally backed mortgages from July 24 to July 31. This would typically protect homeowners with Federal Housing Administration, Fannie Mae and Freddie Mac loans.

Another relief measure, set to expire this month, also has been extended — this time through Sept. 30, giving homeowners who missed an opportunity to get a forbearance agreement a second chance to apply for some relief.

Some housing and economic experts believe they are in a race against time despite Gov. Andrew Cuomo extending the statewide eviction and foreclosure program through Aug. 31.

“As we approach the light at the end of the COVID-19 tunnel, it is critical that we continue to protect both New York’s tenants and business owners who have suffered tremendous hardship throughout this entire pandemic,” Cuomo said last month, in a release.

In addition to protecting tenants from evictions, the legislation also protects owners with 10 or fewer residential properties from foreclosure by allowing them to file hardship declarations with their mortgage lender, other foreclosing parties, or even with a court.

“I am very pleased that the Assembly passed this critical legislation that will help keep people in their homes and small business owners in their stores,” Assemblyman Jeffrey Dinowitz said last month about the eviction and foreclosure relief bill Cuomo extended. “We are still in the midst of a global pandemic and the worst economic crisis in our lifetimes. I believe it would be immoral to allow the current moratorium to lapse. This law will save lives.”

Still, there is still one considerable group left out of all of this, Lorenzo said condominium and co-op owners. They can face foreclosure even if they’re paid up on their mortgage, but are behind on common charges.       

“Those cases are moving forward, so we’re working with the courts to represent them,” Lorenzo said. “We’re appearing as friends of the court, and if they want our assistance, then they could talk to us.”