What is the “Moratorium on Evictions and Foreclosures”? The federal government and state authorities have recently enacted laws and issued orders placing a ban on certain evictions and foreclosure proceedings. The phrase “Moratorium on Evictions and Foreclosures” refers to these laws and orders. Please note that the ban on Evictions and Foreclosures is not universal. Homeowners and tenants must determine whether they qualify for the relief on offer. This Advisory will help you make this determination.
Can I be evicted if I am unable to pay my rent during this crisis? The short answer is no. But we will need to dig a bit deeper to answer more detailed and relevant questions. If you rent your home in Indiana there are two sets of laws which will help you answer some of your question:
Can my landlord demand lump-sum payments for any missed rent payments? Nothing in the federal and state guidelines suggests that landlords will not be able to demand lump-sum payment of missed rent. Once the moratorium is lifted landlords could use the failure to pay the delinquency in lump sum as a basis for an eviction action.
Can I be foreclosed upon if I am behind on my mortgage payments? The short answer is no. But we will need to dig a bit deeper to answer more detailed and relevant questions. If you own a residential property in Indiana there are two keys pieces of legislation which will help you answer this question:
Can I request forbearance of Mortgage Payments if I am unable to make them? The answer is yes, but only if your home has a federally backed mortgage (refer to “How do you know if your loan is federally backed” to learn more). If your loan qualifies, you are entitled to a forbearance for up to 180 days, and this period shall be extended an additional period of 180 days upon request. The borrower’s initial or extended forbearance period may be shortened at the borrower’s request. During the potential 360-day forbearance period, no fees, penalties, or interest beyond the amounts scheduled or calculated shall accrue on the borrower’s account. The only caveats allowing servicers to collect fees, penalties, or interest are that any forbearance request must be made by the borrower and within the covered period. The covered period appears to be during the emergency or until December 31, 2020, whichever is earlier.
Do I have to make lump-sum payments after my forbearance ends? It is unclear how mortgage servicers would allow borrowers to make up the missed payments. While a lump-sum payment is not completely out of the questions, we are hopeful that the federal government will step in and provide further direction and relief. At this time, we know that servicers will not be allowed to assess any fees or charges related to the missed payments. Some mortgage companies are already offering options to: (1) pay off the lumpsum; (2) structure a pay off over a set period of time; or (3) extend the maturity or pay off date to make up the missed payments. You must contact your own mortgage servicer to obtain further details.
How do I determine if my home has a federally backed mortgage? The CARES Act foreclosure and forbearance provisions apply in large part only to “federally backed mortgages.” In addition, prior to CARES Act enactment different federally backed mortgage investors had announced different foreclosure policies (see “Links to Foreclosure Suspensions by Federally Backed Mortgage Investors in Effect Prior to the CARES Act,” infra). It is thus imperative to determine if a loan is federally backed and which investor is the backer: Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), Veterans Affairs (VA), and the U.S. Department of Agriculture’s Rural Home Service (RHS). The following tools let one quickly determine which investor backs a particular homeowner’s mortgage loan.
Once you have determined that you have a federally backed mortgage please refer to the link for your specific investor to determine if you are entitled to additional relief.
FHA — https://www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf
VA — https://www.benefits.va.gov/HOMELOANS/documents/circulars/26_20_8.pdf
USDA Direct (bottom of page 1) — https://www.rd.usda.gov/sites/default/files/USDA_SA_COVID19_SFHContinuity03202020.pdf
USDA Guaranteed — https://www.rd.usda.gov/sites/default/files/USDA_RD_SA_Foreclosure_and_Eviction_Relief_COVID19_NationalEmergency.pdf
Fannie Mae — https://singlefamily.fanniemae.com/media/22261/display
Freddie Mac — https://guide.freddiemac.com/app/guide/bulletin/2020-4
Is there any mortgage or rent assistance available for financial hardship related to COVID-19? At this time, we are not aware of any federal or state mortgage or rent assistance programs for COVID-19. The largest private fund which is offering assistance in Indiana is the United Way COVID-19 Fund. If you are facing financial hardship you should apply immediately!
https://uwci.org/covid-19-cerf/.
Can I be evicted if I am unable to pay my rent during this crisis? The short answer is no. But we will need to dig a bit deeper to answer more detailed and relevant questions. If you rent your home in Indiana there are two sets of laws which will help you answer some of your question:
- Governor Holcomb’s March 19th, 2020 executive order, bars landlord from initiating any eviction actions until the state emergency has been terminated. As of now, Indiana’s state emergency is set to terminate on May 5th, 2020. It is unclear whether existing eviction actions should be stayed pursuant to this order. However, this question is a matter of interpretation for the courts. The language in this executive order can be interpreted to imply a stay on all existing eviction actions.
- The federal government under the CARES Act has also placed a bar on all new eviction actions for non-payment of rent, fees or charges. The CARES Act only applies if the subject property has a federally backed mortgage loan or participates in a federal housing program (example: HUD public housing programs) (refer to “How do you know if your loan is federally backed” to learn more). The CARES Act moratorium will last for 120 days starting March 27th, 2020. The CARES Act also requires landlords (if their properties are covered under the CARES Act) to serve a 30-day notice prior to eviction and the notice must be issued after the moratorium has ended. The CARES Act moratorium has significant loop holes as it: (1) does not apply to existing eviction actions; (2) is only limited to evictions which are initiated for non-payment of rent but does not address “no cause” evictions often permissible under lease agreements. It is of importance to note that if your leased property has federally backed mortgage or your landlord participates in a federal housing program there might be broader relief which is available by different federally backed mortgage investors like Fannie Mae, Freddie Mac, VA, FHA, etc. (Please refer to “Foreclosure Suspensions by Federally Backed Mortgage Investors in Effect Prior to the CARES Act,” Section for more details).
Can my landlord demand lump-sum payments for any missed rent payments? Nothing in the federal and state guidelines suggests that landlords will not be able to demand lump-sum payment of missed rent. Once the moratorium is lifted landlords could use the failure to pay the delinquency in lump sum as a basis for an eviction action.
Can I be foreclosed upon if I am behind on my mortgage payments? The short answer is no. But we will need to dig a bit deeper to answer more detailed and relevant questions. If you own a residential property in Indiana there are two keys pieces of legislation which will help you answer this question:
- Governor Holcomb’s March 19th, 2020 executive order, bars mortgage servicers from initiating any foreclosure actions until the state emergency has been terminated. As of now, Indiana’s state emergency is set to terminate on May 5th, 2020. The executive order applies to all residential properties. It is unclear whether exiting foreclosure actions should be stayed pursuant to this order. However, this question is a matter of interpretation for the courts. The language in this executive order can be interpreted to imply a stay on all existing foreclosure actions.
- The federal government under CARES Act has also placed a bar on all foreclosures on federally backed mortgages (refer to “How do you know if your loan is federally backed” to learn more) until May 17th, 2020. The CARES Act explicitly covers both existing and new foreclosure actions. If your home has a federally backed mortgage, there might be broader relief which is available by different federally backed mortgage investors like Fannie Mae, Freddie Mac, VA, FHA, etc. (Please refer to “Foreclosure Suspensions by Federally Backed Mortgage Investors in Effect Prior to the CARES Act,” Section for more details).
Can I request forbearance of Mortgage Payments if I am unable to make them? The answer is yes, but only if your home has a federally backed mortgage (refer to “How do you know if your loan is federally backed” to learn more). If your loan qualifies, you are entitled to a forbearance for up to 180 days, and this period shall be extended an additional period of 180 days upon request. The borrower’s initial or extended forbearance period may be shortened at the borrower’s request. During the potential 360-day forbearance period, no fees, penalties, or interest beyond the amounts scheduled or calculated shall accrue on the borrower’s account. The only caveats allowing servicers to collect fees, penalties, or interest are that any forbearance request must be made by the borrower and within the covered period. The covered period appears to be during the emergency or until December 31, 2020, whichever is earlier.
Do I have to make lump-sum payments after my forbearance ends? It is unclear how mortgage servicers would allow borrowers to make up the missed payments. While a lump-sum payment is not completely out of the questions, we are hopeful that the federal government will step in and provide further direction and relief. At this time, we know that servicers will not be allowed to assess any fees or charges related to the missed payments. Some mortgage companies are already offering options to: (1) pay off the lumpsum; (2) structure a pay off over a set period of time; or (3) extend the maturity or pay off date to make up the missed payments. You must contact your own mortgage servicer to obtain further details.
How do I determine if my home has a federally backed mortgage? The CARES Act foreclosure and forbearance provisions apply in large part only to “federally backed mortgages.” In addition, prior to CARES Act enactment different federally backed mortgage investors had announced different foreclosure policies (see “Links to Foreclosure Suspensions by Federally Backed Mortgage Investors in Effect Prior to the CARES Act,” infra). It is thus imperative to determine if a loan is federally backed and which investor is the backer: Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), Veterans Affairs (VA), and the U.S. Department of Agriculture’s Rural Home Service (RHS). The following tools let one quickly determine which investor backs a particular homeowner’s mortgage loan.
- Fannie Mae and Freddie Mac have easy loan look-up websites to determine if they own a mortgage. See https://ww3.freddiemac.com/loanlookup/ and https://www.knowyouroptions.com/loanlookup#.
- To determine if a loan is FHA-insured, look for an FHA case number on the mortgage document, specific language in the mortgage and note forms, or through the payment of an FHA premium on the mortgage statement. In some cases, unfortunately, loans may have been stripped of their FHA-insured status; call HUD’s National Servicing Center at 877-622-8525 if there are questions.
- A VA-guaranteed loan also has specific language in the note and mortgage identifying it as a VA loan, and there are fees paid to the VA noted in closing documents.
- While a borrower with a mortgage directly extended by the RHS will be very familiar with the agency, homeowners with privately serviced RHS-guaranteed loans often do not know the loan’s status. If an RHS-guaranteed loan is suspected, directly ask the servicer to review the homeowners’ closing documents.
Once you have determined that you have a federally backed mortgage please refer to the link for your specific investor to determine if you are entitled to additional relief.
FHA — https://www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf
VA — https://www.benefits.va.gov/HOMELOANS/documents/circulars/26_20_8.pdf
USDA Direct (bottom of page 1) — https://www.rd.usda.gov/sites/default/files/USDA_SA_COVID19_SFHContinuity03202020.pdf
USDA Guaranteed — https://www.rd.usda.gov/sites/default/files/USDA_RD_SA_Foreclosure_and_Eviction_Relief_COVID19_NationalEmergency.pdf
Fannie Mae — https://singlefamily.fanniemae.com/media/22261/display
Freddie Mac — https://guide.freddiemac.com/app/guide/bulletin/2020-4
Is there any mortgage or rent assistance available for financial hardship related to COVID-19? At this time, we are not aware of any federal or state mortgage or rent assistance programs for COVID-19. The largest private fund which is offering assistance in Indiana is the United Way COVID-19 Fund. If you are facing financial hardship you should apply immediately!
https://uwci.org/covid-19-cerf/.