Who is affected by the recently issued foreclosure and eviction moratorium?
There is some confusion on the eviction moratorium. President Trump just ordered HUD to suspend evictions and foreclosures through mid-April. Here is the exact wording of that document and link to it.
Properties secured by FHA-insured Single Family mortgages are subject to a moratorium on foreclosure for a period of 60 days. The moratorium applies to the initiation of foreclosures and to the completion of foreclosures in process.
Similarly, evictions of persons from properties secured by FHA-insured
Single Family mortgages are also suspended for a period of 60 days.
In addition, deadlines of the first legal action and reasonable diligence
timelines are extended by 60 days.
Federal Housing Authority
The foreclosure and eviction moratorium only applies to FHA, Fannie Mae or Freddie Mac backed loans.
However, independent of that, many counties have already halted evictions and courts are only processing emergency cases. Sheriffs are not assisting with evictions either.
For questions about this policy, the FHA Resource Center provided an email address: [email protected]
What does eviction moratorium mean?
Landlords are finding themselves in a difficult situation, having to pay all expenses and mortgage payments that come with owning a rental property and potentially not getting rent from it.
First, we have to understand that “no evictions” moratorium doesn’t mean that tenants shouldn’t pay rent. Many tenants are still working, some from home.
How can a landlord protect his investments and at the same time do the right thing?
If your tenants are late paying the rent, call them or send them an email immediately to ask if they are OK and ask them to call you if they have problems with paying rent. Indicate that you are willing to accept partial payments or work out a solution temporarily with proof of hardship.
Proof of Hardship examples would be a doctor signed confirmation of being affected by COVID, a letter from the employer showing a layoff or a decrease in 50% of regular hours or salary. A letter from EDD.gov that the tenant has been approved for Unemployment due to the financial loss.
Some states like Texas are waiving the usual 10-day waiting period before filing for unemployment. Remind your tenants that this may be available to them as help, email them a link to your local workforce commission website
If you decide to accept partial payments or waive rent payments make sure you sign a past due rent workout agreement available for free download under Rental Forms.
If you are paying mortgage on your rental, work with your lender, call them. Most are already prepared to waive your mortgage payments for up to 90 days with no interest and penalties. This is not an ordinary event so be proactive, pick up the phone, and call your bank who finances your asset/assets.