With the year 2020 behind us, the outlook on the battle against COVID-19 is promising and there are several reasons to feel optimistic about 2021. First, the U.S. Food and Drug Administration has approved multiple COVID-19 vaccines, with initial rounds already being distributed. The gradual recovery of the economy since its initial fallout in the early spring has also been a source of optimism for many Americans. However, while we are hopeful for a return to normalcy in 2021, certain COVID-19 consumer legislative protections will remain in effect – at least for the near future.
On December 2, 2020, the Federal Housing Finance Agency (“FHFA”) extended the foreclosure and eviction moratoriums on single-family foreclosures and real estate owned evictions until at least January 31, 2021. Weeks after the FHFA’s extension, the Federal Housing Administration (“FHA”) similarly announced an extension of foreclosure and eviction moratoriums on properties subject to federally-backed mortgage loans through February 28, 2021. In addition to the moratorium extension, the FHA extended the deadline for mortgagors with federally backed mortgages to request an initial COVID-19 forbearance for up to a year through February 28, 2021. Under the FHA’s extension, borrowers may be eligible to receive a COVID-19 forbearance until February 2022.
Additionally, on December 21, 2020, Congress passed a $900 billion COVID-19 relief package, which includes $25 billion in rental assistance and extends the Centers for Disease Control and Prevention’s (“CDC”) ban on residential evictions through January 31, 2021. Accordingly, while there are obvious reasons to feel optimistic about the turn of the calendar, the continued extension of consumer protections and COVID-19 relief aid is a stark reminder that we are still going to see court and other delays.
Similar to their federal counterparts as we previously reported, individual states continue to issue their own protections to homeowners and tenants. Download the comprehensive spreadsheet capturing the current orders, legislation and policies on foreclosures and evictions. Specifically, the following states have issued additional orders and/or proposed legislation that restrict foreclosures and evictions in response to the ongoing COVID-19 pandemic:
Illinois: On January 8, 2021, Governor Pritzker signed Executive Order 2021-01 and announced the suspension of residential evictions against qualified tenants through February 6, 2021. The Governor’s Executive Order closely resembles the qualifications set forth in the CDC’s Agency Order and requires a declaration by tenants that they expect to earn less than $99,000 during the 2020 calendar year ($198,000 for couples filing jointly); were not required to report any income in 2019 to the Internal Reporting Service; or received a stimulus check pursuant to Section 2201 of the CARES Act. Tenants must also certify that: (1) they are unable to pay rent as a result of COVID-19; (2) they will likely become homeless if evicted; and (3) they are using their best efforts to make timely partial payments that are as close to fully payment as the tenants’ circumstance may permit. Under the Executive Order, tenants are still required to satisfy all outstanding rent payments upon the moratorium’s expiration.
Moreover, pending before the Illinois Legislature is the Emergency Economic Recovery Renter and Homeowner Protection Act. This Act proposes comprehensive protections to mortgagors, renters, and landlords during the COVID-19 pandemic. Specifically, Section 15 of the Act proposes a cancellation of rental debt for tenants diagnosed with COVID-19 or advised by a health care provider to self-quarantine; have lost income through furloughs, layoffs or other employment interruption; or are paying more for household expenses, child care, or health care during the moratorium. Section 15 also prohibits landlords from charging fees or negatively reporting to a consumer agency or credit bureau with respect to a tenant’s nonpayment of rent.
Sections 20, 30, and 35 summarily offer a 180-day moratorium on foreclosures and prevents new eviction filings and enforcement of judgments. Section 25 proposes a 180-day suspension on mortgage payments for homeowners and forbearance on taxes, insurance, and association fees. Additionally, the Act provides that mortgage servicers shall establish loss mitigation criteria and procedures for borrowers who request forbearance and affirm that they are experiencing a COVID-19 related hardship.
Under the proposed legislation, an injured party may file an action in a court of competent jurisdiction against a person who violates the Act. Notably, if the alleged injury occurred under a Section of the Act that expires at the end of the moratorium period, an injured party is not enjoined from filing an action after the moratorium period expires, subject to any applicable statute of limitations. Under the proposed law, an injured party may recover $1,000.00, or the actual and consequential damages resulting from the injury, whichever is greater, for each violation of this Act, as well as costs and reasonable attorneys’ fees.
Additionally, the Attorney General or State’s Attorney may request, and a court may impose, a civil penalty against a non-compliant lender in a sum not to exceed $50,000.00 against any person found by the court to have engaged in any violation of the Act.
Maryland: Governor Hogan issued Executive Order No. 20-10-16-01 extending the suspension of all residential and commercial evictions when a tenant is able to verify that he or she has suffered a Substantial Loss of Income. Under the Order, a Substantial Loss of Income is defined as: (i) loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to job loss, reduction in compensated hours of work, closure of place of employment, or the need to miss work to care for a home-bound school-age child; and (ii) with respect to an entity, a substantial loss of income resulting from COVID-19 or the related proclamation of a state of emergency and catastrophic health emergency, including, without limitation, due to lost or reduced business, required closure, or temporary or permanent loss of employees.
The Order also places conditions upon residential foreclosures and requires mortgage lenders to comply with notice requirements as to mortgagors’ rights to forbearance options for both federal and non-federal mortgage loans.
The aforementioned protections to tenants and borrowers shall remain in effect until the Maryland State of Emergency is terminated and the Catastrophic Health Emergency is rescinded.
New Jersey: On December 21, 2020, Governor Murphy signed Executive Order No. 210 and extended the prohibition on removing individuals from properties due to an eviction or foreclosure proceeding. The Executive Order enjoins the enforcement of judgments, Writs of Possessions, or Warrants of Removal for at least 60 days following the expiration of the Public Health Emergency. New Jersey’s Public Health Emergency is currently scheduled to expire on January 23, 2021, although it may continue to be extended. Accordingly, the earliest possible date to enforce a foreclosure or eviction judgment is currently March 24, 2021.
New York: On December 28, 2020, Governor Cuomo signed the COVID-19 Emergency Eviction and Foreclosure Act of 2020. The Act provides an additional layer of consumer protection by preventing residential evictions, foreclosure proceedings, credit discrimination, and negative credit reporting related to the COVID-19 pandemic. Specifically, the Act places a moratorium on residential foreclosure and eviction actions until May 1, 2021.
Prior to initiating a foreclosure action, a lender is required to serve proper notice, which includes a Hardship Declaration to the borrower. To benefit from the protections of the Act, a borrower must declare that he/she is experiencing a financial hardship due to the COVID-19 pandemic. Under the Act, a financial hardship may include a significant loss of household income, childcare responsibilities, moving expenses, or other circumstances related to the COVID-19 pandemic. If a borrower provides a lender with a Hardship Declaration, the lender is prohibited from filing an eviction action until May 1, 2021. No court shall accept a foreclosure filing unless the petitioner files an affidavit demonstrating the manner in which the Hardship Declaration was provided to the borrower. For any pending foreclosure action, the court shall stay the matter for at least sixty days. In any foreclosure action in which a judgment of sale has been issued, but not yet executed, the court shall stay the execution of the judgment until the court has held a status conference with the parties. The Act further prohibits credit discrimination or negative reporting to agencies with regard to a stay of a foreclosure proceedings.
With respect to evictions, the Act requires a landlord to provide proper notice of any eviction action, including service of a Hardship Declaration to the tenant. To benefit from the protections of the Act, a tenant must declare that he/she is: (1) experiencing a financial hardship due to the COVID-19 pandemic; and (2) vacating the residential property and moving into a new property would pose a significant health risk due to age, disability, or an underlying medical condition. If the tenant provides the landlord with a Hardship Declaration, the landlord is prohibited from filing an eviction action. The Act further enjoins courts from accepting or filing any petition for eviction, unless the petitioner files an affidavit demonstrating the manner in which the Hardship Declaration was served on the tenant, or a declaration by the landlord that the tenant is a substantial safety hazard or persistently and unreasonably infringes the use and enjoyment on other occupants. For any eviction action pending on the effective date of the Act, a court shall provide a Hardship Declaration to the tenant and stay the matter for at least sixty days.
Unless extended, the protections and provisions of the Act shall expire on May 1, 2021.
Ohio: On December 3, 2020, House Bill No. 576 was presented before the Ohio House Committees and proposes a suspension on foreclosure activity and the eviction of residential tenants during the COVID-19 State of Emergency. Under the proposed legislation, foreclosure actions may not be filed and all pending foreclosures will be stayed during the State of Emergency. Further, the Bill enjoins courts from issuing or enforcing residential eviction orders, and prohibits landlords from collecting rental payments that were unpaid during the State of Emergency.
Oregon: Governor Brown previously signed HB 4204 and HB 4213 into law, which provides a moratorium on foreclosure and eviction proceedings. Under HB 4204, mortgage lenders are prohibited from treating a borrower’s nonpayment as a default or assess any late fees or charges if the borrower notifies the lender that the borrower will not be able to make the requisite mortgage payments. However, it should be noted that the law’s protections do not apply to judgments of foreclosure and sales that were issued prior to the public health emergency period. HB 4204 also provides a right to a private cause of action, where a borrower suffers an ascertainable loss as a result of a mortgage lender’s violation of the above-referenced protections. A borrower who prevails in the action may further recover the borrower’s court costs and attorneys’ fees.
Oregon’s legislation similarly provided protections to tenants from eviction proceedings under HB 4213 by prohibiting landlords from initiating or continuing any eviction action on the basis of nonpayment of rent or without cause. HB 4213 further provides a six-month repayment period following the expiration of the moratorium. Landlords will also be prohibited from reporting late rent payments to credit reporting bureaus during the moratorium. Landlords are, however, permitted to notify tenants of owed rent. In turn, tenants will have fourteen days to advise landlords of their intention to use the six-month grace period as a repayment option.
On December 17, 2020, Governor Brown signed Executive Order No. 20-67 extending the foreclosure and eviction moratoriums, as set forth in HB 4204 and HB 4213, until March 1, 2021.