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Eviction Bans and Mortgage Relief During COVID-19

In addition to the staggering public health effects of the coronavirus pandemic, the economic impacts have left many people across the US suddenly facing a significant or total loss of income. This has led to a severe degree of potential housing insecurity for both renters and homeowners, many of whom are worried about their ability to continue paying their rent or mortgage. In response, the federal government has enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides many individuals with direct cash assistance as well as expanded access to unemployment benefits. The CARES Act, along with a variety of state and local government programs and policies, also contains protections for renters and homeowners by prohibiting many evictions and requiring assistance for qualifying mortgages.

Eviction Bans and Emergency Protections for Renters

Under the CARES Act, people who rent from a property owner who has a federally backed mortgage cannot be evicted or charged penalties for nonpayment of rent for 120 days starting from the day of the law’s enactment. Once that period of time has expired, a landlord must still give tenants with a 30-day notice before requiring them to vacate. Evictions in public housing have also been suspended until the end of April 2020.

State, city, and county governments across the country have gone further, implementing bans on eviction, and in some cases prohibiting late fees and utility shut-offs based on nonpayment of rent. Depending on the jurisdiction, these policies have taken the form of state legislation, executive orders, and local ordinances. While most of these initiatives require tenants to pay rent eventually, and also tend to require a showing of harm related to the COVID-19 pandemic, they are generally more protective of tenants and easier to figure out than federal options.

For example, in California, all renters are entitled to a delay of eviction proceedings until May 31, 2020, provided that they can make a showing of injury associated with coronavirus and give notice to their landlords. The state government also placed a cap on rent increases, and authorized local governments to halt evictions of tenants impacted by the pandemic. The City of Los Angeles has implemented an ordinance placing a moratorium on residential evictions for the duration of the local state of emergency related to COVID-19, and gives tenants up to a year to pay back any rent owed during that time period. Harm that can qualify tenants for this kind of relief include income loss due to reduced hours or workplace closure, loss of income due to increased childcare expenses or school closures, coronavirus-related health care expenses due to a tenant’s own illness or that of a family member, and other reasonable expenditures associated with the pandemic.

Some localities have included commercial tenants in eviction suspension laws, while a significant number have not. It is also important to bear in mind that in many areas, landlords can still evict tenants for reasons related to criminal activity on the premises, or because of a threat to the health or safety of other tenants.

Mortgage Assistance and Foreclosure Relief

Under the CARES Act, homeowners with federally backed mortgages are guaranteed a 60-day moratorium on foreclosures starting on March 18, 2020 if they have experienced losses due to the coronavirus outbreak. These borrowers also qualify for up to 180 days of forbearance. Property owners with federally backed multifamily mortgages have access to up to 90 days of forbearance provided that they do not evict any tenants or charge them fees for late rent. These programs are available until the national state of emergency ends or December 31, 2020, whichever comes first.

State and local governments have also taken action to protect homeowners who may be struggling to make their mortgage payments due to the COVID-19 emergency. For example, the Governor of California issued an executive order allowing local governments to bar all foreclosures until May 31, 2020. A number of major banks have also agreed to provide California borrowers with a 90-day forbearance period, along with a pledge that no negative credit reporting will occur if they fall behind on payments. In New Hampshire, foreclosures are suspended for the duration of the state of emergency. Financial institutions in New York have likewise been urged to suspend mortgage payments and foreclosures, though this recommendation is not binding.

Negotiating Alternatives

Tenants and homeowners facing financial difficulties due to the coronavirus pandemic, particularly those who are not able to access government protections, may also be able to negotiate solutions with their landlords or lenders that will allow them to remain in their housing. For example, tenants may be able to notify their landlords that they will not be able to pay their full rent, and possibly reach an agreement to pay partial rent and make up the balance in future months. Similarly, mortgage loan borrowers may be able to pursue loan modification or other alternatives that allow them to avoid negative credit reporting or foreclosure proceedings.

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