The world has completely changed as it regards to what is referred to as the new normal. With the negative implications that came with the Covid-19 virus causing the economy to flatline, caused a domino effect in which employers had no choice but to lay off employees. This made it quite difficult for people to make their standard rent or mortgage payments. This in and of itself would be an enormous problem for the United States Government.
The populace of the United States became worried as to whether or not they would be homeless. Evictions loomed, defaults arising in mortgage payments and worries of foreclosure eviction became of concern. Legislatures had to put on their thinking-caps to come up with a solution that would benefit the people. Due to this global issue, the Government had to enact relief statutes to aid people going through their respective housing crisis. Due to these statutes, rent and mortgage has been suspended.
Federal Housing Statutes Enacted for Relief during Covid-19
To combat the housing crisis that swept the United States, the federal government enacted the Coronavirus Aid, Relief, and Economic Cares Security Act (CARES). This gave tenants and home owners rental and mortgage relief during Covid-19.
Federal Statute on Evictions
The Government effected a moratorium on evictions through the Act from 27th of March 2020 to the 24th of July 2020. The Centers for Disease Control and Prevention (“CDC”) from the 4th of September 2020 to the end of the year put a pause on all residential evictions as a preventative measure. President Donald Trump then extended the period up until the 31st of January 2021. The new elected President Biden further extended the period to March 31, 2021. This moratorium period protected tenant’s renting properties with a federally backed mortgage. These mortgages should either be backed by either:
1. The Federal Housing Administration;
2. The Federal Housing Finance Agency otherwise known as the Fannie Mae and Freddie Mac mortgages;
3. The US Department of Agriculture; or
4. The Veterans Administration
In order to prevent Covid-19 from spreading, landlords rights to evict tenants for non-payment has been taken away. The question therefore is rent suspended due to Coronavirus? The answer is invariably yes. However, this is just a suspension. The tenant still has an obligation to pay the back rent. The back rent, however, needs not be paid in a lump sum.
Federal Statute on Mortgage and Foreclosure
As mentioned above the same could be said regarding homeowners who have a federally guaranteed mortgage as mentioned under the CARES Act. These mortgages backed by the Federal Government must also be backed by the same administrations listed above. A mortgagee/lender is prevented from foreclosing the home due to non-payment during the moratorium period as foreclosure eviction laws protect the mortgagor.
The US Department of Housing and Urban Development commenced such a moratorium on March 14, 2020 for a period of 60 days. Due to the uncertainty that this virus brought about, there had to be further extensions throughout 2020. One on the 14th of May 2020, then the 17th of June 2020 and again on 17th of December 2020 to last until the 28th of February 2021. President Biden then extended the period through an executive order until the 31st of March 2021. POTUS once again extended the foreclosure moratorium until the 30th of June 2021. The mortgage payment forbearance registration has also been extended to the 30th of June 2021.
To be protected by the Moratorium advantage an individual must make $99,000 or less per year or couples $198,000.
How to Stop Eviction After Foreclosure
Certain states allow a grace period after foreclosure. An individual may negotiate an extension of such a period with the bank or the new owner of the property. An individual may also negotiate to become a tenant for years with the new owner.
The Coronavirus has caused the economy to halt, especially the housing sector. Many Americans have been laid off due to this virus. It has made them unable to make the standard monthly payments like housing. Many people in the United States have lease agreements or are paying mortgages. To halt in the economy invariably will cause them not to be able to conform to their monthly responsibilities.
The Government of the United States, alongside the CDC had to work expeditiously in keeping their citizens safe. Therefore, in order to 1) prevent the spread of the virus and 2) protect the citizens of the United States, foreclosure eviction laws and necessary reliefs were enacted. These laws will reduce the burden on homeowners paying mortgages and tenants. The landlords and lenders need not worry either because at the expiration of the moratorium, homeowners and tenants are obligated to pack back rent and back mortgage due. You may also seek foreclosure help from the new owners or lenders of the property.