Federal Eviction Moratoriums Extended Again

The CDC and HHS, pursuant to President Biden’s executive order, extended the residential eviction moratorium through March 31, 2021. The CDC’s Director, Rochelle P. Walensky, M.D., M.P.H., released a statement extending the eviction moratorium.

The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) extended its eviction moratorium of tenants living in properties secured by single-family mortgages insured by the FHA through March 31, 2021. HUD’s Mortgagee Letter 2021-03 is available online.

On January 19, 2021, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac extended its single-family foreclosure and REO eviction moratorium for distressed mortgage borrowers through February 28, 2021. The FHFA issued a press release extending this moratorium.

The federal eviction moratorium, which was originally scheduled to expire on August 31, 2020, was extended to protect more than 28 million homeowners across the country. The Fannie and Freddie foreclosure moratorium only applies to single-family mortgages, while the eviction moratorium applies to real estate owned properties acquired by Fannie and Freddie via a foreclosure or a deed-in-lieu of foreclosure. The FHFA continues to urge borrowers struggling to make their mortgage payments or facing foreclosure to contact their loan servicers, as homeowners impacted by COVID-19 may be eligible for forbearance plans or a reduction or suspension of their mortgage payments under the CARES Act. In a bulletin dated August 27, 2020, Fannie Mae stated, “[d]uring the period of the extension, servicers may not, except with respect to a vacant or abandoned property, initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure sale.” This moratorium has since been extended through February 28, 2021.

HUD and the FHA also recently extended its foreclosure and eviction moratorium for FHA-insured single-family loans through March 31, 2021. The FHA’s single-family foreclosure and eviction moratorium has been in place since March 18, 2020, and continues to apply to homeowners with FHA-insured, Title II single-family forward and Home Equity Conversion (reverse) mortgages.

The U.S. Department of Veterans Affairs (VA) announced on August 24, 2020, its eviction and foreclosure moratorium for properties secured by VA-guaranteed loans through December 31, 2020. This moratorium has since been extended through February 28, 2021.

Despite the moratorium extension for these select mortgagors, residential renters may still be subject to eviction proceedings depending upon the jurisdiction.

On September 1, 2020, The CDC Ordered a Nationwide Eviction Halt Impacting Residential Landlords of Single-Family, Multifamily, and Mobile Homes.

Following an executive order issued by President Trump, the CDC announced a temporary ban on residential evictions through December 31, 2020. This ban has since been extended through March 31, 2021. Acting pursuant to its regulatory authority under the Public Health Act (42 C.F.R. § 70.2), which allows the CDC to take measures to prevent the spread of disease when the actions taken by state health authorities are deemed insufficient, the order was implemented to prevent the further spread of COVID-19. Under the order, tenants who earn less than $99,000 a year (or $198,000 if joint filers) may submit a declaration to its landlord, under penalty of perjury, which asserts:

• The tenant is using its best efforts to obtain any available government assistance for rent.
• The tenant’s expected income is under the required threshold.
• The tenant’s inability to pay full rent.
• The tenant is using its best efforts to make timely, partial payments, as close to the full payment as possible, to the best of its ability.
• Eviction would render the tenant homeless or force the tenant into a congregate or shared living situation.

Effective September 4, 2020, landlords cannot evict residential tenants for non-payment of rent. However, the order provides:

“This order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract. Nothing in this order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent.”

Residential landlords may still evict tenants for engaging in criminal behavior, imposing health or safety risks to other tenants, damaging the property, violating applicable codes, or violating other contractual obligations set forth in their respective leases.

As noted above, pursuant to President Joe Biden’s executive order, this moratorium has been extended through March 31, 2021.

Looming “Adverse Market Fee”

While the moratorium extensions are good news for struggling mortgage borrowers, the FHFA has announced an additional fee for consumers looking to refinance a mortgage backed by a government-sponsored enterprise (GSE). In response to projected losses of $6 billion dollars for Fannie Mae and Freddie Mac due to COVID-19, this new one-half percent (0.5%) fee, labeled an “adverse market fee,” will apply to all consumers refinancing any GSE mortgage in excess of $125,000. Thus, beginning on December 1, 2020, consumers seeking to refinance will have to pay an additional $500 for every $100,000 refinanced.

The Coronavirus Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the COVID-19 situation develops.