How Has The Moratorium On Foreclosure Impacted Landlords and Property Owners?

The trend that seems to be gathering nationally is a lot of smaller landlords are selling their properties to larger, more capitalized businesses, landlords, or property holding companies because they can’t continue with the lack of rent payments for the property. Many landlords are having the same financial problems as their tenants, so the government regulations are merely passing the tenant’s financial problems on to the landlord. Landlords are in a dire position, especially the smaller landlords who don’t have many properties. Landlords haven’t been getting rent payments, they may never see those missed rent payments, and they could have serious troubles ahead.

Did the CDC Moratorium on Evictions Expire in July 2021 as It Was Set to End?

The Center for Disease Control (CDC) foreclosure moratorium does not appear to have survived summer 2021, but the Federal Housing Finance Agency (FHFA) eviction moratorium did and was extended through September 30, 2021. It is not that a lender cannot potentially pursue a default under a mortgage or litigation to obtain that default, but it prevents mortgage lenders from evicting anyone whose mortgage may have already been foreclosed upon, at least it did until September 30, 2021.

Are There Any Movements to Reenact or Extend the CDC Eviction or Foreclosure Moratorium That Ended in July?

The CDC portions of the foreclosure moratorium are probably dead based on the latest US Supreme Court rulings. The Supreme Court refused to hear one case and said that the CDC moratorium should naturally expire in July. The administration attempted to have the CDC extend it, but it again was recently struck down by the Supreme Court. It does not appear that the CDC moratoriums will continue, however, it’s hard to say if the FHFA moratorium will continue. FHFA has more authority since it essentially controls Fannie Mae and Freddie Mac and may extend that moratorium depending on the circumstances.

Will Homeowners Lose Their Homes Immediately Now That the CDC Moratorium Has Ended?

The eviction moratorium will keep people from being evicted from their homes, but it will not stop a lender from pursuing a foreclosure action. If a homeowner can get into bankruptcy court before the foreclosure is finalized, then they may have an opportunity to save their home through a chapter 13 or chapter 7 bankruptcy. Once a foreclosure is final, the property right to that house is gone and the homeowner no longer can save the house.

Do Banks Want to Put Delinquent Homeowners in Foreclosure at This Time?

A foreclosure will depend on the lender and whether it is a residential or commercial property. For residential properties, the federal government has recently instituted requirements that lenders attempt to work through some issues of foreclosure. It is a great time to try and work out a forbearance or deal with your lender to restructure a loan. On the commercial side, you most likely will not have the same requirement. Commercial mortgages may still be able to negotiate a deal with the bank, but there’s not going to be any obligation on the bank to make a deal.

Is it Always Advisable to Restructure a Loan When Facing Foreclosure?

The decision to restructure a loan will differ case-by-case. The determining factor primarily concerns the value of your home versus the amount of debt in the home. If you have a home that is underwater, where you owe more than the value of the home, then it may be a good idea to let that home go as part of a bankruptcy process. This will prevent the lender from chasing after you for the amount that you might still owe, beyond the actual value of the home, after a short sale.

On the other side, if you have equity in the property, then you may want to try to save the house. If this is the case, we will factor how much equity you have compared to how much total debt you owe. Each case will need to be evaluated by looking at some of the specific facts that fit your situation. Chapter 7 or chapter 13 bankruptcy may be viable options for saving a home.

For more information on the Impact of Eviction Moratorium on Landlords, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (205) 506-3354  today.