From Forbearance to Foreclosure In Oregon

Oregon Gov. Kate Brown has extended the state’s moratorium on mortgage foreclosures through the end of 2021.

That means Oregonians struggling to make their mortgage payments due to economic losses caused by the COVID-19 hardships will have a few extra months to catch up.

The moratorium laid out by House Bill 2009 was supposed to end June 30, 2021, but provisions of the bill gave authority to Governor Brown to extend it twice. The first extension guaranteed homeowners safety through at least  Sept. 30. They’ll now have until Dec. 31.

In a statement, Brown said she considered the surge in infections and hospitalizations caused by the delta variant when making her decision. HB 2009 laid out a deadline of Aug. 16 for Brown to extend it for the second time.

The foreclosure moratorium on government-backed loans has virtually stopped foreclosure activity over the past year,” said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. “But mortgage servicers have been able to begin foreclosure actions on vacant and abandoned properties, which benefits neighborhoods and communities. These foreclosures are likely causing the slight uptick we’ve seen over the past few months.”The year 2020 left us with the COVID-19 epidemic, protest movements, the economy, unemployment, and the political crisis, issues that have marked the development of 2021.

One of the most sensitive topics is the lack of income many people are experiencing. It is not needed to explain that hundreds of thousands have lost jobs, businesses, and the potential for earning money.

At this point, many homeowners had signed for a forbearance plan, hoping to catch up in the near future. According to the Mortgage Banker Association, there are close to 1.5 million homeowners in forbearance plans. 

The MBA report of November 9, 2020, was not clear about the actual status of that 19% reduced forbearance plan. Were they currently on their mortgage, or were they on the foreclosure banker’s list?.

However, the report MBA on September 27, 2021, shows a 16.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet. 

According to the CARES Act, homeowners affected by the crisis can request a 180 days forbearance, being extendable to another 180 days. However, many homeowners and independent landlords have contacted us to report that their lenders have rejected their applications for a 180 days forbearance extension. These rejected applicants state the lenders changed rules without notice.

We have contacted banks in the Portland metro area and other cities across Oregon to get deep on this information, but the lenders answered that every case is unique. So, they can’t apply the same criteria to each defaulted loan.

The real estate market sped up during the coronavirus epidemic. Interest rates are historically low. However, the market has an increase in houses available for sale. Home prices get increased as much as 26%. As a result, home equity increased the house’s equity as well.

Here’s What Can Go Wrong

At the end of the forbearance period, all late payments are due at once, which is not realistic for most families, especially if you haven’t made a payment in 6, 9, or 12 months. Most servicers have other options to reinstate loans, but we don’t know the terms for reinstatement. 

However, Members of Congress are also pushing banks and mortgage servicing companies to provide some sort of private relief. Rep. Maxine Waters, D-California and chairwoman of the House Financial Services Committee, publicly asked the CEOs of the major Wall Street banks earlier this summer whether they all planned to keep borrowers in forbearance if needed when the moratorium ends. All of the CEOs of the big six banks said they planned to do so.

Common Options to Reinstate  Forbearance

  • A sum slump payment
  • Add the missed payments to the current amount and cancel them over time.
  • Deferral missed payments to the end of the home loan or sale.
  • Loan modification.
  • Forclosure.

We have heard stories about people whose mortgages were suspended and who did not know they had ever applied for that suspension. If you can make your mortgage payments during the COVID-19, do it; you will avoid a lot of unnecessary headaches.

Banks have their own regulations. They are free to apply their so-called criteria to every forbearance case. We had received information from our clients where banks have denied their request for a forbearance extension just because their mortgages were not current.

We couldn’t certify this information because the loan servicers reported by our clients did not answer questions about rejections. We have found out that a significant percentage of these rejected loan extensions were mortgage loans non-federally backed. Some of them were 3 to 6 months forbearance plan, but their servers denied the plan extension without further explanation at the end of this period. As a result, many of them are at risk of foreclosure, and others are in the process already.

Contacting Your Mortgage Loan Servicer

The CARES Act indicates that for homeowners to obtain a forbearance plan for their federally backed home loans, they do not need to prove struggling due to the coronavirus hardships to their lenders. The same applies to getting an extension of the plan as well. However, it is highly recommended to document any conversation and any sort of communication you may have with your loan servicer.

In Oregon and across the nation, there are hundreds of reports of misinformation given to homeowners. The lack of information or erroneous ones has caused damage to homeowners and independent landlords affected by the crisis.

It is important to remark that any contact with your servicer must be documented and filed for your protection. We wrote In a previous publication about a client who had requested a forbearance plan in May 2021. In this situation, our client contacted his loan servicer over the phone. He explained his income situation and all the trouble he was going through because of the pandemic. 

On the other end of the phone, a bank official assured the homeowner that a forbearance plan was granted to him, and everything was settled, so there was nothing to worry about. After 90 days passed, the homeowner in this story received a Notice of Default. Immediately, he contacted his servicer because he was protected by a forbearance plan as far as his knowledge.

This owner spent days trying to prove that his allegations from previous contacts with his lender were true and that he was approved for a forbearance relief plan. Unfortunately, he was unsuccessful because he had nothing in writing as proof. The lender suggested he pay the missing payments in full, or a foreclosure process would be his fate.

We purchased his house for cash in a transaction we closed at the end of August. Our client had substantial equity on his property. He relocated and started all over again with the money he received for selling his house to us.

If you are currently in default or think you will because you are concerned about your mortgage payments, contact your lender to discuss your options and steps to resolve the problem. Remember to file and document all communications you have with them. We can help you. Having a trusted and knowledgeable professional like us on your side is essential and could be the determining factor in helping you with your home needs.

Your Home Equity Is Much Appreciated

Home equity is the difference between what you owe on your loan and what your home is currently worth. If you owe $200,000 on your mortgage loan and your home is worth $300,000, you have $100,000 in home equity. High demand for housing causes prices to skyrocket.

Your equity can increase in two ways. As you pay down your mortgage, the amount of equity in your home will rise. Your equity will also increase if the value of your home jumps. Your equity can fall, too, if your home’s value drops at a rate faster than the speed at which you are paying down your mortgage’s principal balance. An economic crisis can produce a fall in the real estate market, dropping home prices dramatically.

The Federal Reserve cut interest rates to avoid significant economic damage caused by COVID-19. During this pandemic time, we have a strange combination that has sent home prices skyrocketing. On the one hand, low interest rates encourage people to borrow a home. On the other hand, homes available for sale had reached their lowest numbers in years. People do not list houses for sale for fear of physically contacting potential buyers.

These factors combination has made increased properties’ value by more than 20%. Unexpectedly, the coronavirus pandemic brought substantial capital gains to homeowners. The pandemic has brought lost jobs, lack of income, and economic problems to the same homeowners at the same time.

Homeowners may lose the benefit of their home equity by losing their homes in a foreclosure process, and the lenders know that.

Many homeowners, including those with no backed home loans, have reported a sort of misinformation that led them to a delicate situation. Some people find themselves in mortgage loan default and potentially homeless if they don’t act right away.

Selling a House In A Mortgage Forbearance Plan

Selling a house in a forbearance mortgage plan shouldn’t be different than selling a house without it. The home selling traditional process allows anybody to sell his property following a well-established system and regulations. 

The real estate market in Oregon is volatile, especially in Portland. We had seen the bubble inflating since the coronavirus broke out. The low-interest-rate implemented since early 2020 is the fuel that has the home sales on fire.

Selling a house through the real estate market takes time and money. Sellers would hire a real estate agent, prepare the home for sale, which means do repairs, cleaning, schedule buyer’s visits, and wait for the right buyer to show up.

Suppose your house doesn’t need repairs, but the only problem is that you can’t make your mortgage payments. Still, you have many chances to sell your property, either through the market. Or you can sell it to a real estate investor like us.

In another scenario, a seller is going through a difficult situation because of the coronavirus hardship. He needs to sell his home, but he may not have the money to cover all the expenses related to selling his property. 

He got a great chance of not find a real estate agent willing to sell his home. Because most real estate agents don’t deal with unsightly (ugly) properties, they prefer to list houses in perfect condition.

Unemployment and the difficulties of COVID-19 have generated the principal regulations by the authorities of Oregon and the entire country. Like the mortgage forbearance plans, measures to keep people in their homes. 

The problem is that once the plans come to an end, the chances are high that people still will not have the money to get back to normal and pay past due debts ending up losing their properties by foreclosure.

Selling Your Mortgage Forbearance House Fast

The MBA statistics show that nearly three million homeowners have defaulted on their home loans since the coronavirus epidemic broke out. Many of them are unemployed or have had a significant reduction in income, which will make it virtually impossible for them to catch up on late payments.

Despite the coronavirus, home prices in Oregon have increased by about 20%. If the factors involved in selling a home are in the proper place, a home for sale will hang a “Sold” sign in its window in very Little time. But if it is the opposite, homeowners could not sell their homes for a long time.

The bottom line is if you are going through a difficult time, and the only way out is to sell your house, you better do it right away. 

You must take advantage of your home equity. By selling your house for cash, you can pay your current loan debt, save your credit, and use the remaining money to buy another place.

Selling a home through the market takes between 90 to 120 days in normal conditions. Selling your house to us takes 7 days or less.

Don’t hesitate to contact us. Sell your house for cash in a short time. We buy homes.


The forbearance plans are supposed to help homeowners in crisis because of the COVID-19 hardship. However, for many, the forbearance plan can be a straight path to foreclosure

By the CARES Act suggestions, loan servicers should offer relief mortgage plans, but the government doesn’t provide guidelines for the process. Instead, servicers have individual policies and can apply their criteria to every case, creating confusion for homeowners behind in payments and leaving them with no chance to catch up. 

Many homeowners have reported receiving incorrect information from their loan services at our offices. Some of them stated their lenders did not disclose the guidelines and conditions for the forbearance plans, such as potential credit consequences or future credit transactions rejection.

The Oregon real estate market is “hot,” properties are selling faster than usual and at higher prices than the listing price. Home equity had reached over 20% and higher in many cases.

The negative aspect of today’s economy is that many people cannot recover soon. Many homeowners would not be able to get their mortgage loan current after forbearance. Thousands of foreclosures cases would be file in Oregon and across the USA.

However, banks don’t like to deal with foreclosures. A big inventory for them, represents money stucked. In many cases, lenders are willing to negotiate before they file property for foreclosure. 

That is the appropriate time for a homeowner to take advantage of his home equity. Selling the house for cash will open hope to the owners in need of a chance to get back in feet.

The fastest and the easiest way to sell your property is by selling it to us. 

We buy houses for cash. We close in 7 days or less. Contact us by filling the form on this page or dial our phone number directly.


Hi, I'm Scott Dalinger a real estate investor in Portland, Oregon. I focus on helping homeowners and rental property owners out of negative situations by offering cash for their property. I research and write about real estate on my business website.

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now...

We buy houses in ANY CONDITION in OR. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call 503-809-4855...
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published.