Collections, Repossession and Foreclosure Moratoriums High on List
May 1, 2020 – In a letter sent to congress, the National Consumer Law Center (NCLC) drafted and sent a letter to Congress with a list of proposed relief efforts to protect persons “experiencing tremendous financial distress because of the COVID-19 pandemic.” With little surprise, these include moratoriums on collections, repossession and foreclosure activity during the COVID-19 pandemic.
Major elements of the letter include the following;
Read the Letter and Entire List Here!
Imposing a moratorium on all foreclosures and evictions for the duration of the pandemic. This moratorium should apply to all types of mortgages and all kinds of housing, including cooperatives and manufactured homes, whether titled as real or personal property. Protecting every home
Halting all debt collection activity. Debt collection activity by collectors, creditors, and government entities should be suspended. Debt collectors should not be allowed to start new lawsuits and pending cases should be stayed. All new and existing garnishments, setoffs, and car repossessions should be stopped, and all requests to stop automatic payments should be promptly honored.
Requiring payment forbearance and flexible repayment options for all types of payment obligations. Mortgage companies, landlords, banks, auto lenders, and other creditors should be required to provide forbearances on payments for the duration of the crisis. Forbearances should remain in place for a period after the health crisis abates to allow people and small businesses to get back on their feet financially before having to begin repayment.
Prohibiting negative credit reporting. No one should see their credit record harmed as a result of the pandemic. There should be a permanent moratorium on all negative credit reporting related to payments missed during the crisis and longer protections upon request for people who face lasting financial hardship from the outbreak.
In closing, the letter states and lists the national organizations in support of these proposals.
“Workers, communities and small businesses need greater protections from Congress to maintain their homes, cars, and finances during this public health emergency. As the country takes all measures necessary to preserve life and health, these financial protections will better enable the millions of people suffering economic hardship to get through the pandemic as safely as possible and provide them the opportunity to rebuild once the emergency is over. “
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