CARES Act Eviction and Foreclosure Moratorium For Public Housing and Government Backed Loans
The CARES Act imposes a temporary moratorium on evictions of renters in federally subsidized apartments and on foreclosures against homeowners with federally backed mortgages.
UPDATE: On May 7, 2020, Governor Cuomo issued Executive Order No. 202.28 which extended the temporary moratorium on evictions and foreclosure proceedings to August 20, 2020, for those facing financial hardship from the COVID-19 crisis.
1. MORATORIUM ON EVICTIONS
What properties are covered by the eviction moratorium?
Residential properties which are occupied by a tenant pursuant to a residential lease or has no lease and is on a property which is subject to:
A. the Violence Against Women Act of 1994;
B. the rural housing voucher program of the Housing Act of 1949;
C. a federally backed mortgage loan; or
D. a federally backed multifamily mortgage loan.
How long is the moratorium on evictions?
The moratorium started on March 27, 2020, and continues for 120 days. It prevents the landlord of a property subject to the conditions A through D above from:
A. filing a court case to evict for nonpayment of rent or other fees or charges, or
B. charging fees, penalties, or other charges to the tenant related to such nonpayment of rent.
The landlord must give a tenant 30 days' notice to vacate the unit and cannot give such a notice during the 120-day period that started on March 27, 2020.
Didn’t New York City already prohibit any new evictions?
Yes, in New York City, the courts, in response to the COVID-19 emergency, already imposed a moratorium on the commencement of any actions, including eviction cases.
Borrowers whose properties are located elsewhere in the state are advised to check the court rules in those jurisdictions.
2. MORATORIUM ON MORTGAGE FORECLOSURES AND RIGHT TO REQUEST FORBEARANCE
What type of loans are covered by the foreclosure moratorium and the right to request forbearance?
All mortgage loans that are owned, insured, or guaranteed by one of the following entities:
A. HUD (including Federal Housing Administration loans and reverse mortgages);
B. Department of Veterans Affairs;
C. Department of Agriculture; or
D. Fannie Mae or Freddie Mac.
but not the property that is vacant or abandoned.
How long is the moratorium?
A mortgage loan servicer cannot initiate foreclosure of the loan, or execute a foreclosure-related eviction or sale for not less than the 60-day period beginning March 18, 2020.
What are the procedures for borrowers to request forbearance?
Properties of 1 to 4 Family Units
The Act describes a simple procedure for the borrower to follow which requires the borrower to (1) submit a request for forbearance to their loan servicer and (2) affirm that the borrower is experiencing financial hardship during the COVID-19 emergency. No other documents to establish the financial hardship are required. There are no fees, penalties, or interests related to this forbearance.
This request must be submitted during the “covered period” which started on March 27, 2020, and will end on the sooner of:
A. the termination date of the COVID-19 national emergency declared by the President; or
B. December 31, 2020.
The Act requires the lender to grant forbearance for up to 180 days and if the borrower requests it, an additional 180 days. If the borrower requests that the initial or extended period of forbearance be shortened, then the period of forbearance may be shortened.
Multifamily properties with federally backed loans
The Act describes procedures for the multi-family borrower to follow which requires the borrower to (1) submit an oral or written request for forbearance to their loan servicer and (2) affirm that the borrower is experiencing financial hardship during the COVID-19 emergency. There will be no fees, penalties, or interest related to this forbearance.
The borrower must be current in its payments as of February 1, 2020.
Upon receipt of the oral or written request (we urge such borrowers to submit written requests), the servicer shall:
A. document the financial hardship;
B. provide forbearance for up to 30 days, and
C. extend forbearance for up to 2 additional 30-day periods upon the request of the borrower provided that, the borrower’s request for an extension is made during the covered period and, at least 15 days prior to the end of the forbearance period described in subparagraph B above.
The multi-family borrower has the option to discontinue the forbearance at any time.
What protections are given to tenants during the foreclosure moratorium?
The law imposes a moratorium on evictions of tenants in such government-backed housing for the duration of the forbearance period.
For the duration of the forbearance period, the borrower may not:
1. evict or initiate the eviction of a tenant from the property solely for nonpayment of rent or other fees or charges, or
2. charge any late fees, penalties, or other charges to a tenant.
The borrower who receives forbearance:
1. may not evict a tenant located in the property until the borrower issues a 30-day notice to the tenant; and
2. may not issue such a notice until after the expiration of the forbearance.