What To Know About Rent And Foreclosure Moratoriums

September 25, 2020

National shelter in place orders across the country have affected many American’s abilities to make rent and mortgage payments. In response, part of the CARES Act, which was signed into law on March 27, 2020, includes moratoriums on evictions for certain renters, as well as on certain foreclosures. However, the moratoriums only cover properties or mortgages that are federally backed, leaving many renters and homeowners confused about the scope of this assistance. It is also unclear whether the duration of the moratoriums will be long enough given the uncertainty of the impacts of the pandemic. Here are some brief takeaways of the rent and foreclosure moratoriums as they stand now.

Rental Moratoriums
Under the Act, lessors cannot evict renters living in federally funded housing or single-family and multifamily properties that are financed or insured by federally backed mortgages. Examples include mortgages by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), the Department of Agriculture’s (USDA) and those owned by the Freddie Mac and Fannie Mae enterprises. For single-family and multi-family rentals, lessors may not evict tenants for non-payment of rent for 120 days, regardless of whether the lessor receives a federal forbearance. Landlords that do receive a forbearance must provide eviction protections to their tenants for an equal amount of time as they receive. Landlords also cannot impose fees or other charges due to the non-payment of rent. Additionally, tents must be provided with 30 days notice after the end of the moratorium before eviction proceedings can be filed.

However, the moratorium does not cover evictions that were filed prior to the Act or evictions due to other reasons than non-payment of rent. It also does not cover non-federally back housing or property financed through private banks. For more information, read our Guide for Renters During the Coronavirus Pandemic here. Renters can see if their rental is covered by the Act’s protections here.

Foreclosure Moratoriums
The CARES Act also provides protections for homeowners with federally-backed mortgage loans. The Act states that foreclosure proceedings cannot be initiated until after May 18, 2020. As with the eviction moratorium, this does not apply to foreclosures initiated prior to the Act.

Additionally, the Act provides covered homeowners with the right to request a forbearance of their mortgage payment from their lender for 180 days and can be extended for another 180 days at the homeowners’ request. During the forbearance, the lender cannot charge fees, penalties, or interest that would otherwise not be charged on timely payments. For more information, read our Guide to Mortgage Forbearance Under the CARES Act here.

Other Responses
Given that the CARES Act only covers federally-assisted or financed properties, millions of American renters and homeowners are still without housing protection. In response, several states have passed similar moratoriums on evictions and foreclosures. Some private lenders, such as Bank of America, Wells Fargo, JP Morgan, and others have agreed to mortgage forbearances from 30 to 90 days. Some state courts, including those in California, have also issued their own judicial orders that they will not hear eviction or foreclosure proceedings until after shelter in place orders are lifted. If you are experiencing hardships due to the pandemic, you should contact your lender or landlord immediately to see what type of assistance they can provide to you.