COVID-19 Foreclosure and Eviction Moratorium
The SARS-2/Covid-19 pandemic has created a great deal of financial hardship for tens of thousands of people. As a result of job and income losses suffered as a result of pandemic-related layoffs, the pandemic has impacted both those who rent homes and those who own homes. For a significant part of this year the federal government, through executive action taken by the Federal Housing Administration (the "FHA"), which is a part of the United States Department of Housing and Urban Development ("HUD"), and also more recently, by the Center for Disease Control ("CDC"), has attempted to ameliorate some of the economic disruption by ordering a moratorium on certain eviction and foreclosure lawsuits throughout the country. But there is no "free lunch" in the moratorium because in the end the rent and mortgage loan payments must still be paid at some point. The HUD moratorium impacts both evictions and foreclosures and covers certain residential real properties that are encumbered by a loan where the loan is insured through the FHA. The CDC moratorium impacts only evictions but is not tied to their being a federally-backed loan on residential property and instead affects any residential rental property nationwide. Both moratoria are scheduled to expire on December 31, 2020, however it is possible that under the most recent pandemic-related aid package being discussed in Congress that these moratoria will be further extended through January 31, 2021.
The eviction and foreclosure moratoria do not eliminate the money that is owed by renters and borrowers to their respective landlord's and lenders. And although much needed focus has been on the hardships being encountered by some tenants, it is just as important for the public to realize that many rental properties are owned by individuals and small businesses who owe loans on those properties or who otherwise rely upon the income from those properties to support themselves and therefore are being equally impacted by the pandemic.
With each passing month that rent and loans are not being paid, the mountain of potential lawsuits is building, which could lead to a landslide of evictions and foreclosures being filed once the moratoria expire. If you are one of the persons impacted by the moratoria, it is important not to ignore the obligation to pay the rent and loans and to take proactive steps to reach agreements with your landlords and lenders to avoid having a lawsuit filed against you.