Worried about Eviction or Foreclosure? You Don't Need to Be in Most Markets

• Author: Monica Jackson
• Posted: 2024-02-19

Eviction and foreclosure are an unfortunate part of the housing market that disproportionately affect economically disadvantaged people. In most cases, rent rises faster than wages, so people earning the least find themselves literally unable to pay to live. For example, while many DC suburbs have eviction rates of about 25% per year, rural areas in the Midwest see less than 1% of people being evicted from their rental units.

Especially in large metro areas or otherwise high cost of living regions, many are worried they'll be next as a member of that 25% of the population getting evicted. However, there isn't a need to worry about foreclosure or eviction in most circumstances, and here's why.

Eviction and Foreclosure Are Mostly Outlawed

In direct response to COVID-19, many state and local governments have outlawed foreclosure and eviction proceedings. Even though common sense would dictate many people cannot make the same income due to COVID-19 shuttering many industries, some property management companies saw it as an opportunity to get rid of low-income tenants.

In some cases, such as California, executive orders have been signed to ban evicting tenants, even if rent hasn't been paid. You'll need to look into the specifics of your state to see if there has been such an order issued. However, in many cases, an executive order isn't actually necessary. This is because, in most states, the declaration of a "state of emergency" always temporarily halts any eviction or foreclosure proceedings.

Even if you aren't in a state where that is the law, almost all courts are closed except for emergency matters. To be evicted or face foreclosure, you'll need to attend court, something that isn't possible in the vast majority of the country right now. In short, regardless of the reason, it's almost impossible for landlords to evict tenants right now due to COVID-19. It's unclear how long this will last, or if it will ever let up.

Be Wary

If you believe you're facing eviction or foreclosure, it's important to be aware of the fact that many landlords either ignore the law or hope that tenants don't know the law. They may still try to order you to leave the premises when it's unlawful for them to. In some cases, tenants will actually be able to collect monetary compensation if a landlord attempts this. That's why it's critical to keep recordings of all landlord interactions when at all possible, especially if you consider yourself at risk for this type of action.

Of course, there are also the "anti-foreclosure" companies. They generally work on an aggressive loan model. They'll give you a loan in exchange for home equity so that you can temporarily make that mortgage payment to the bank. There are even some "rental assistance" companies that will do the same thing. While their services are entirely legal to offer, you likely won't need them due to the pandemic.

This means that these companies' bottom lines are hurting. As more and more people realize that these companies are no longer necessary to prevent them from losing their homes, they're increasingly turning away from them. This means that the companies are now using more aggressive marketing tactics, including calling low-income people and strongly implying that they'll face foreclosure unless they sign a contract with the company. Never make any verbal or written agreement with such a company until an unbiased lawyer has reviewed it and determined it's fair. However, you should probably just hang up if you get such a call, since these companies are essentially irrelevant at this point.

Making Sense of the Situation

COVID-19 has caused many markets to go into "panic mode" and many people to do the same. With the nation at a heightened state of anxiety, it's reasonable that many people are giving into scare tactic marketing at the moment. This makes it very important to take a step back when you're facing an eviction or foreclosure threat.

Rather than reply right away, first do the research. Simply by Googling, you can easily find out whether such an order is legal at the moment or not. If it happens to fall under a narrow exception where it is legal, you may need to default to the traditional venues. However, for most people, COVID-19 is guaranteeing housing security for the foreseeable future.