Ban On Foreclosures Extended Until 2021, Protecting More than Eight Million People
In late August, the Department of Housing and Urban Development (HUD) extended the ban on evictions and foreclosures until 2021, protecting more than eight million homeowners with single-family mortgages. The agency had previously only extended loan forgiveness on single family home mortgages that were insured and backed by the Federal Housing Administration through the end of August.
Below, we discuss which mortgages are not covered by this development, the most recent executive order on the issue, and what other protections might be available to those facing eviction or foreclosure at this time and in the future.
What Is Not Included
Note that this extension does not include residential mortgages backed by Freddie Mac and Fannie Mae; government-run companies that guarantee approximately 50 percent of the entire US residential mortgage market, both of which last extended moratoriums on evictions and foreclosures on single-family homes through August 31.
August Executive Order Could Mean Fannie Mae & Freddie Mac Properties Will Follow Suit
However, the Trump administration did sign an executive order on providing assistance to renters and homeowners in August, declaring that it will take “all lawful measures to prevent residential evictions and foreclosures resulting from financial hardships caused by COVID-19,” indicating that the pressure is now on these entities to follow suit and also extend their moratoriums through the end of 2020. Given that the companies are government-run, the chances are high that they will also end up extending their moratoriums. Note that the executive order also directed HUD and the Treasury to identify potential sources of funding to aid struggling tenants.
Protections Already Provided by The Protecting Tenants in Foreclosure Act
Many renters and homeowners do not realize that they are also already protected by the Protecting Tenants in Foreclosure Act (PTFA), which covers foreclosures on a:
- federally-related mortgage loan; or
- dwelling or residential real property after June 23, 2018
Tenants are protected if they are under a “bona fide lease” or tenancy, where the mortgagor is not the tenant and the lease was the product of “an arm’s length-transaction” that requires rent which is not substantially less than fair market value or reduced due to a subsidy. The PTFA requires that:
- tenants be provided with 90-day notice to vacate in all instances; and
- tenants with bona fide agreements entered into prior to the date of notice of foreclosure must be allowed to remain until the end of their lease, which only reverts to 90-day notice to vacate if the owner plans to occupy the property as their primary residence or local laws allow for agreements to be terminated at will.
If You Are facing Foreclosure in Florida, Contact Lawyers Who Protect Homeowners and Tenants Against Eviction and Foreclosure
If you have any questions or concerns about eviction or foreclosures in Florida, including what laws might be available to protect you against a foreclosure proceeding, contact the Tampa foreclosure attorneys at HD Law Partners right away. It is important to know that not only do banks often engage in unlawful practices that result in constructive evictions, but the laws on these issues are changing every week, with negotiations continuing over measures that can be put in place to protect homeowners.
Resource:
fdic.gov/regulations/compliance/manual/5/v-16.1.pdf
whitehouse.gov/presidential-actions/executive-order-fighting-spread-covid-19-providing-assistance-renters-homeowners/
politico.com/news/2020/08/18/hud-foreclosure-evictions-ban-397960
