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How Does The $2,000,000,000,000 CARES Act Help Homeowners and Tenants?

The Coronavirus Aid, Relief, and Economic Security Act or “CARES Act” became law on March 27, 2020. Out of 335 pages, just over one page pertains to owners of single-family homes, townhouses, and condos. About a page and a half pertains to people who own and rent multi-family investment properties. And, there is about a page and a half on evictions. The great majority of the Act addresses unemployment, medical issues, and appropriation of funds to various government agencies. There is also a sizable section on $500,000,000,000 in loans, guarantees, and investments that the Treasury Secretary gets to dole out.

I’ve posted the applicable sections below but first, here is my summary of the key points for homeowners and tenants:

  • All of the protections apply only to properties that have “Federally backed mortgage loans.”
    • This is primarily limited to loans that are insured by Federal Housing Administration (“FHA”)(generally for lower income families), guaranteed or insured by the Department of Veterans Affairs (“VA”), guaranteed, insured or made by the Department of Agriculture, or purchased or securitized through Federal National Mortgage Association (“FNMA”) or Federal Home Loan Mortgage Corporation (“Freddie Mac”).
      • Here’s how you know if any of this applies to you:
        • For FNMA:
        • For Freddie Mac:
        • FHA and VA Loans:
          • If you are a homeowner, review your mortgage and note. If you don’t have a copy saved, you can find your mortgage online in the local property records office. Here are links to the South Florida official records offices:
          • If you are a tenant, by using the name of the company or person that owns your property (which should be on your lease or can be found on your county’s property appraiser website), you can use the above links an to find your landlord’s mortgage, if there is one.
          • FHA
            • FHA mortgages will have a provision that states something like: “Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit Lender’s rights, in the case of payment defaults, to require immediate payment in full and foreclose if not paid. This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary.”
            • The bottom left corner may also indicate that you have an FHA loan.
          • VA:
            • The top of the mortgage should state: “THIS LOAN IS NOT ASSUMABLE WITHOUT THE APPROVAL OF THE DEPARTMENT OF VETERANS AFFAIRS OR ITS AUTHORIZED AGENT”.
            • The bottom of each page should reference “Department of Veterans Affairs.”
            • The last page of should state something to the effect of: “NOTICE TO BORROWER Department of Veterans Affairs regulations at 38 C.F.R. 36.4337 provide provide as follows: ‘Regulations issued under 38 U.S.C. Chapter 37 and in effect on the date of any loan which is submitted and accepted and approved for a guaranty or insurance thereunder, shall govern the rights, duties, and liabilities of the parties to such loan and any provisions of the loan instruments inconsistent with such regulations are hereby amended and supplemented to conform thereto.'”
  • Next, if you or your landlord have a “Federally backed mortgage loan”:
    • For property owners, there are two categories of protections: 1) those that own residential real property, including condos, designed to house one to four families; and 2) those that own residential multifamily real property, designed to house five or more families.
      • Residential real property for one to four families
        • Regardless of your current delinquency status on the loan, if you are experiencing a financial hardship due, “directly or indirectly,” to COVID-19, you can request and receive a forbearance for up to 360 days (it starts with 180 days but you can request another 180 days before the prior period expires.)
          • During the forbearance, no extra fees, penalties, or interest can be charged beyond what you would be charged as if you were timely paying.
          • You will need to provide an “attestation to a financial hardship caused by COVID-19.”
          • The question is here is: After the forbearance, what happens next? At that point, all the money you didn’t have to pay is suddenly due. We’ve seen this before in hurricanes and it has not been helpful in the long run.
            • Nothing requires lenders to tack this money on the back of the loan.
        • For these loans and these types of properties only, a mortgage servicer cannot initiate a foreclosure, move for judgment or sale, or execute on an eviction or sale until May 18, 2020. There is no mention of whether existing cases can progress though. And there is a well known phrase when construing statutes: “expressio unius est exclusio alterius.” “Under the principle of statutory construction, expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another.” Mallery v. Norman L. Bush Auto Sales & Service, Inc. 2D19-1466, 2020 WL 1280791, at *3 (Fla. 2d DCA March 18, 2020)(internal citation omitted). The idea behind this is that the legislature certainly knows how to state that all pending foreclosure proceedings are stopped. They didn’t write that. So by the rules of statutory instruction, the CARES Act does not stop all current foreclosure proceedings.
      • Residential multifamily properties for five or more families
        • As long as you were current on your loan as of February 1, 2020, you can request a forbearance if you are experiencing a financial hardship due, “directly or indirectly,” to COVID-19. In response, a servicer shall provide a thirty-day forbearance that can be extended for two additional thirty-day periods. Extension requests must be made at least fifteen days prior to the expiration of the prior period.
        • During the forbearance period, an owner of this type of property cannot evict a tenant, or charge late fees, penalties, or other charges, solely because of late rent payments.
    • If you are a tenantAgain, you must live in a “covered property,” which includes those with “Federally backed mortgage loans” as defined above, housing that’s part of the Violence Against Women Act of 1994, or housing that part of the rural housing voucher program.
      • Until Saturday, July 25, 2020, no landlord can file an eviction action, or charge fees, penalties, or other charges, due to nonpayment of rent.
      • Before they can evict, a landlord must also give thirty-days’ notice.

Here’s the applicable sections from the CARES Act:

SEC. 4022. FORECLOSURE MORATORIUM AND CONSUMER RIGHT TO REQUEST FORBEARANCE.
(a) DEFINITIONS.—In this section:
(1) COVID–19 EMERGENCY.—The term ‘‘COVID–19 emergency’’ means the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.).
(2) FEDERALLY BACKED MORTGAGE LOAN.—The term ‘‘Federally backed mortgage loan’’ includes any loan which is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1- to 4- families that is—
(A) insured by the Federal Housing Administration under title II of the National Housing Act (12 U.S.C. 1707 et seq.);
(B) insured under section 255 of the National Housing Act (12 U.S.C. 1715z–20);
(C) guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z–13a, 1715z–13b);
(D) guaranteed or insured by the Department of Veterans Affairs;
(E) guaranteed or insured by the Department of Agriculture;
(F) made by the Department of Agriculture; or
(G) purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
(b) FORBEARANCE.—
(1) IN GENERAL.—During the covered period, a borrower with a Federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency may request forbearance on the Federally backed mortgage loan, regardless of delinquency status, by—
(A) submitting a request to the borrower’s servicer; and
(B) affirming that the borrower is experiencing a financial hardship during the COVID–19 emergency.
(2) DURATION OF FORBEARANCE.—Upon a request by a borrower for forbearance under paragraph (1), such forbearance shall be granted for up to 180 days, and shall be extended for an additional period of up to 180 days at the request of the borrower, provided that, at the borrower’s request, either the initial or extended period of forbearance may be shortened.
(3) ACCRUAL OF INTEREST OR FEES.—During a period of forbearance described in this subsection, no fees, penalties, or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract, shall accrue on the borrower’s account.
(c) REQUIREMENTS FOR SERVICERS.—
(1) IN GENERAL.—Upon receiving a request for forbearance from a borrower under subsection (b), the servicer shall with no additional documentation required other than the borrower’s attestation to a financial hardship caused by the COVID–19 emergency and with no fees, penalties, or interest (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract) charged to the borrower in connection with the forbearance, provide the forbearance for up to 180 days, which may be extended for an additional period of up to 180 days at the request of the borrower, provided that, the borrower’s request for an extension is made during the covered period, and, at the borrower’s request, either the initial or extended period of forbearance may be shortened.
(2) FORECLOSURE MORATORIUM.—Except with respect to a vacant or abandoned property, a servicer of a Federally backed mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.

SEC. 4023. FORBEARANCE OF RESIDENTIAL MORTGAGE LOAN PAYMENTS FOR MULTIFAMILY PROPERTIES WITH FEDERALLY BACKED LOANS.
(a) IN GENERAL.—During the covered period, a multifamily borrower with a Federally backed multifamily mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency may request a forbearance under the terms set forth in this section.
(b) REQUEST FOR RELIEF.—A multifamily borrower with a Federally backed multifamily mortgage loan that was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance under subsection (a) to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID–19 emergency.
(c) FORBEARANCE PERIOD.—
(1) IN GENERAL.—Upon receipt of an oral or written request for forbearance from a multifamily borrower, a servicer shall—
(A) document the financial hardship;
(B) provide the forbearance for up to 30 days; and
(C) extend the 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 under subparagraph (B).
(2) RIGHT TO DISCONTINUE.—A multifamily borrower shall have the option to discontinue the forbearance at any time.
(d) RENTER PROTECTIONS DURING FORBEARANCE PERIOD.—A multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance—
(1) evict or initiate the eviction of a tenant from a dwelling unit located in or on the applicable property solely for nonpayment of rent or other fees or charges; or
(2) charge any late fees, penalties, or other charges to a tenant described in paragraph (1) for late payment of rent.
(e) NOTICE.—A multifamily borrower that receives a forbearance under this section—
(1) may not require a tenant to vacate a dwelling unit located in or on the applicable property before the date that is 30 days after the date on which the borrower provides the tenant with a notice to vacate; and
(2) may not issue a notice to vacate under paragraph (1) until after the expiration of the forbearance.
(f) DEFINITIONS.—In this section:
(1) APPLICABLE PROPERTY.—The term ‘‘applicable property’’, with respect to a Federally backed multifamily mortgage loan, means the residential multifamily property against which the mortgage loan is secured by a lien.
(2) FEDERALLY BACKED MULTIFAMILY MORTGAGE LOAN.— The term ‘‘Federally backed multifamily mortgage loan’’ includes any loan (other than temporary financing such as a construction loan) that—
(A) is secured by a first or subordinate lien on residential multifamily real property designed principally for the occupancy of 5 or more families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and (B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
(3) MULTIFAMILY BORROWER.—the term ‘‘multifamily borrower’’ means a borrower of a residential mortgage loan that is secured by a lien against a property comprising 5 or more dwelling units.
(4) COVID–19 EMERGENCY.—The term ‘‘COVID–19 emergency’’ means the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies
Act (50 U.S.C. 1601 et seq.).
(5) COVERED PERIOD.—The term ‘‘covered period’’ means the period beginning on the date of enactment of this Act and ending on the sooner of—
(A) the termination date of the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.); or
(B) December 31, 2020.

SEC. 4024. TEMPORARY MORATORIUM ON EVICTION FILINGS.
(a) DEFINITIONS.—In this section:
(1) COVERED DWELLING.—The term ‘‘covered dwelling’’ means a dwelling that—
(A) is occupied by a tenant—
(i) pursuant to a residential lease; or
(ii) without a lease or with a lease terminable under State law; and
(B) is on or in a covered property.
(2) COVERED PROPERTY.—The term ‘‘covered property’’ means any property that—
(A) participates in—
(i) a covered housing program (as defined in section 41411(a) of the Violence Against Women Act of 1994 (34 U.S.C. 12491(a))); or
(ii) the rural housing voucher program under section 542 of the Housing Act of 1949 (42 U.S.C. 1490r); or
(B) has a—
(i) Federally backed mortgage loan; or
(ii) Federally backed multifamily mortgage loan.
(3) DWELLING.—The term ‘‘dwelling’’—
(A) has the meaning given the term in section 802 of the Fair Housing Act (42 U.S.C. 3602); and
(B) includes houses and dwellings described in section 803(b) of such Act (42 U.S.C. 3603(b)).
(4) FEDERALLY BACKED MORTGAGE LOAN.—The term ‘‘Federally backed mortgage loan’’ includes any loan (other than temporary financing such as a construction loan) that—
(A) is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1 to 4 families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and
(B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
(5) FEDERALLY BACKED MULTIFAMILY MORTGAGE LOAN.—
The term ‘‘Federally backed multifamily mortgage loan’’ includes any loan (other than temporary financing such as a construction loan) that—
(A) is secured by a first or subordinate lien on residential multifamily real property designed principally for the occupancy of 5 or more families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and
(B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
(b) MORATORIUM.—During the 120-day period beginning on the date of enactment of this Act, the lessor of a covered dwelling may not—
(1) make, or cause to be made, any filing with the court of jurisdiction to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent or other fees or charges; or
(2) charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.
(c) NOTICE.—The lessor of a covered dwelling unit—
(1) may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; and
(2) may not issue a notice to vacate under paragraph (1) until after the expiration of the period described in subsection (b).

If you have any specific questions, please feel free to e-mail or call and I’ll respond as soon as I can. Banks are still pushing forward on many cases and we are still working hard to serve our clients.

Evan and all of us at the Law Offices of Evan M. Rosen, P.A.

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