D.C. Council Retains Core Foreclosure Protections for Struggling Homeowners

Last week, the D.C. Council unanimously passed the Coronavirus Support Emergency Amendment Act of 2020, a comprehensive emergency bill that is the fourth in a series of omnibus emergency bills. In an effort to consolidate and (in some cases) amend the policy changes passed since the start of the public health emergency, the Act repeals and replaces all prior emergency measures, as well as incorporating further changes and additions. Read more →

D.C. Council Expands Emergency Response to Protect Homeowners from Foreclosure

Yesterday, the D.C. Council took a major step forward in expanding its emergency response to the most critical needs of D.C. residents by unanimously voting to enact the Foreclosure Moratorium Emergency Amendment Act of 2020. The Act provides clear, automatic protection to homeowners in danger of foreclosure due to inability to pay their mortgage or condo fees by explicitly prohibiting foreclosure sales – as well as the initiation of new foreclosures – during the period of the District’s public health emergency, and for 60 days thereafter. The prohibitions apply to in-court and out-of-court foreclosures, both of which are permissible under District law. Read more →

D.C. Council Must Enact a Foreclosure Moratorium for District Homeowners

After several rounds of emergency legislation, the D.C. Council already has passed an impressive list of important measures to try to mitigate the harm to District residents’ safety, wellbeing, and financial security during this unprecedented time. But a major gap in the District’s emergency response so far is the failure to stop foreclosures. The Council must fill this gap by enacting the Foreclosure Moratorium Emergency Amendment Act of 2020 at its legislative session tomorrow. Read more →

D.C. Council Passes Mortgage Relief for District Homeowners; Moratorium Still Needed to Fill the Remaining Gap

The supplemental COVID-19 emergency legislation passed by the D.C. Council on Tuesday included several major consumer protections, including comprehensive protection from the harmful impacts of consumer debt collection during the health emergency. The Council also passed mortgage relief provisions to help homeowners who can demonstrate evidence of a hardship resulting from the public health emergency. For those who qualify, this mortgage relief can provide much-needed breathing room and at least temporarily stave off foreclosure. But the relief has several substantial limitations and will not be able to reach everyone, underscoring the continued need for the District to implement a moratorium that will protect all homeowners from foreclosure during this difficult time. Read more →

D.C. Council Passes Comprehensive Debt Collection Relief for District Consumers

On Tuesday, the D.C. Council passed supplemental COVID-19 emergency legislation that provides comprehensive, necessary protections against debt collection to District consumers. Importantly, the protections in the new law will prevent debt collectors from seizing money in a bank account – including critical COVID-19 stimulus payments – from consumers during and immediately after the public health emergency.

The changes were advocated by a coalition of several local anti-poverty groups, including Legal Aid, Tzedek DC, and Legal Counsel for the Elderly – and with support from Attorney General Karl Racine. Read more →

Urgent Need to Stop Foreclosure Sales Remains Despite D.C. Council Emergency Legislation

Yesterday, the D.C. Council passed emergency legislation to protect District residents in the wake of the coronavirus pandemic. While the emergency legislation provides important protections against eviction, more must be done—and quickly—to prevent District residents from losing their homes to foreclosure. Prohibiting foreclosure auctions from occurring during the District’s public health emergency is critical for protecting the health and stability of District homeowners, many of whom are elderly, low-income, or otherwise vulnerable. We urge the Council to pass standalone emergency legislation to protect vulnerable District homeowners. Read more →

Protecting Paychecks: DC’s New Wage Garnishment Limits Now in Effect

For decades, individuals working in the District have suffered the sudden and destabilizing effects of wage garnishment, a legal process used by creditors to force a person’s employer to divert a portion of their paycheck every pay period to pay down a civil money judgment. Because of the District’s severely outdated law, garnishment from these judgments – often the result of years-old debt collection lawsuits involving credit cards or consumer loans, housing-related debt, or medical bills – has historically caused workers in the District to see up to 25% of every paycheck disappear, with little to no notice. This wreaks havoc on their ability to make the rent, pay for food, and cover other basic necessities, as pay period after pay period, portions of their paychecks are taken away. Read more →

$6 Million Settlement with Debt-Buyer Highlights Illegal Practices and the Need for Consumer Protection

Yesterday, DC Attorney General Karl Racine announced that the District has joined 42 states in a $6 million settlement with the nation’s largest debt buyer and collector — Encore Capital Group, Inc. and its subsidiaries, Midland Credit Management, Inc. and Midland Funding, LLC — in order to resolve claims involving the company’s use of illegal tactics to collect on unverified debts. Read more →

D.C. Foreclosure Prevention Program Reopens, But With Limited Reach

The DC Housing Finance Agency recently announced the reopening of its HomeSaver foreclosure prevention program — funded by the U.S. Treasury Department’s Hardest-Hit Fund — which can provide substantial mortgage assistance to distressed homeowners under limited circumstances. The program focuses on homeowners who are actively receiving unemployment benefits, newly re-employed homeowners who have received unemployment benefits within the last six months, and homeowners who have experienced an involuntary reduction in income of 25 percent or more.

The HomeSaver program, described in more detail in yesterday’s article in The Washington Post and at https://www.homesaverdc.org/, can provide assistance in the form of a lump sum payment to cure mortgage arrears and keep District residents in their homes. Read more →

Senate Passes Tax Bill Extending Key Protections for Distressed Homeowners

Distressed homeowners who have completed short sales and worried about the looming tax consequences of cancelled or forgiven mortgage debt are one step closer to meaningful relief.

Late Tuesday, the Senate passed a bill retroactively extending the Mortgage Forgiveness Debt Relief Act through the year 2014 – meaning that homeowners of underwater properties (i.e., those owing more on their homes than the homes are currently worth) whose lenders have cancelled or forgiven debt as part of a short sale or similar transaction on their principal residence will not be penalized with tax liability. Read more →