LIEB BLOG

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Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts

Saturday, March 28, 2020

Evictions Stopped Under Coronavirus Stimulus - CARES Act

The Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law on March 27, 2020. In addition to the relief enumerated in two of our recent articles (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package and Forbearance and Foreclosure Moratorium in Coronavirus Stimulus), the CARES Act also provides relief to residential tenants.

Under the CARES Act, from March 27, 2020 to July 25, 2020, landlords of 1- to 4-family and multifamily (5 or more) properties with FHA, Fannie Mae, or Freddie Mac mortgage loans may NOT:
  • Initiate a legal action to recover possession based on nonpayment of rent or other fees or charges;
  • Charge fees, penalties or other charges related to the nonpayment of rent;
  • Require the tenant to vacate with less than 30-days’ notice; and
  • Issue the 30-day notice to vacate until after July 25, 2020.
In addition, landlords who obtain a forbearance on their multifamily mortgage due to a financial hardship caused by the COVID-19 outbreak are prohibited from doing the above before their forbearance period expires.

Forbearance and Foreclosure Freeze in Coronavirus Stimulus

On March 27, 2020, the historic stimulus package known as the Coronavirus Aid, Relief, and Economic Security or “CARES” Act was enacted into law.

In addition to the relief enumerated in our recent blog (Nuts & Bolts of Stimulus Package - House Passes 2 Trillion Dollar Stimulus Package), the CARES Act also includes mortgage relief in the form of forbearance periods and foreclosure moratoriums for federally backed mortgages on 1-4 family homes and multifamily (5 or more) homes.

Which mortgages are covered?
  • Federally backed mortgage loans secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) for 1- to 4-families and for on multifamily residential real property (5 or more dwelling units) are covered, these include loans:
  • insured by the Federal Housing Administration;
  • insured under section 255 of the National Housing Act;
  • guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992;
  • guaranteed or insured by the Department of Veterans Affairs;
  • guaranteed or insured by the Department of Agriculture;
  • made by the Department of Agriculture; or
  • purchased or securitized by the Federal Home Loan Mortgage Corporation (Freddie Mac) or Federal National Mortgage Association (Fannie Mae).


What relief is available? 
For 1-4 family properties:
  • Forbearance period of 180 days, which may be extended for an additional 180 days, upon the borrower’s request;
  • No late fees, interest, or penalties during the forbearance period beyond those scheduled or calculated as if borrower is current on the mortgage; and
  • Foreclosure moratorium – servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020;
For multifamily properties
  • Forbearance period of 30 days, which may be extended for up to 2 additional 30-day periods, upon the borrower’s request. Note that the forbearance is only applicable to multifamily mortgage loans that were current on payments as of February 1, 2020. Also, tenants may not be evicted nor issued a notice to vacate for nonpayment or late payment of rent during the forbearance period.
  • Foreclosure moratorium: servicers are prohibited from moving for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction from March 18, 2020 to May 17, 2020. 


What is the process for requesting a forbearance?
  • For 1-4 family properties: Requests for a forbearance may be made by submitting a borrower’s attestation to a financial hardship caused by the COVID-19 emergency. No other documentation is required for the initial 180-day forbearance to be granted.
  • For multifamily properties: Requests for a forbearance may be submitted to the servicer orally or in writing, through an affirmation that the multifamily borrower is experiencing a financial hardship during the COVID-19 emergency.

Thursday, March 19, 2020

60-Day Moratorium on Foreclosures and Evictions for FHA, Fannie Mae, and Freddie Mac Mortgages

On March 18, 2020, the U.S. Department of Housing and Urban Development (HUD) authorized the Federal Housing Administration (FHA) to implement a 60-day moratorium on foreclosures and evictions for single family homeowners with FHA-backed mortgages. Similarly, the Federal Housing Finance Agency (FHFA) also directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for single family mortgages for at least 60 days. These moratoriums were intended to curb the effects of the coronavirus (COVID-19) on homeowners and in connection with the proclamation of the COVID-19 outbreak as a national emergency.

The 60-day moratorium for FHA, Fannie Mae, and Freddie Mac mortgages took effect on March 18, 2020. For FHA mortgages, the moratorium applies to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (reverse) mortgage programs and covers the initiation of foreclosures up to completion of foreclosures in process. Evictions from properties secured by FHA, Fannie Mae and Freddie Mac single family mortgages are also on hold for 60 days.

In addition to HUD and FHFA moratoriums, all evictions and foreclosures are indefinitely suspended in the counties of Nassau County and Suffolk County.