August 2020 Federal and State Extensions of Foreclosures and Eviction Moratoriums

Corporate Law Practice Group

By Corporate Law Practice Group

eviction moratoriumThe Federal Housing Administration (“FHA”) announced another extension of its foreclosure and eviction moratorium through December 31, 2020 for homeowners with an FHA-insured single-family mortgage covered under the CARES Act.

This extension means the FHA has now provided more than nine months of foreclosure and eviction relief to FHA-insured homeowners. As this is a continuation of the moratorium put in place in March of this year, the protections continue to apply to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (“reverse”) mortgages.

As a refresher, the moratorium requires mortgage servicers to:

  1. Halt all new foreclosure actions and suspend all foreclosure actions currently in process for FHA-insured single-family properties, excluding legally vacant or abandoned properties; and
  2. Cease all evictions of persons from FHA-insured single-family properties, excluding actions to evict occupants of legally vacant or abandoned properties.

According to HUD, “homeowners with FHA-insured mortgages should continue to make their mortgage payments during the foreclosure and eviction moratorium if they are able to do so, or seek mortgage payment forbearance pursuant to the CARES Act from their mortgage servicer, if needed.”

Under the CARES Act:

  1. Mortgage servicers are required to offer delayed mortgage payment forbearance to borrowers with FHA-insured mortgages when requested and include an option to extend it for up to a year.
  2. No lump sum payment is required at the end of the forbearance period by the FHA.
  3. Mortgage servicers are required to assess borrowers receiving COVID-19 forbearance to determine eligibility for its special COVID-19 National Emergency Standalone Partial Claim before the end of the forbearance period. The partial claim places all of the borrower’s deferred mortgage payment amounts into a junior lien. This lien is only repaid when the home is sold, the borrower sells the home, the mortgage is refinanced, or the mortgage is otherwise terminated.
  4. Mortgage servicers should consider borrowers ineligible for the partial claim for the FHA’s expanded home retention solutions.

Additional Eviction Moratorium Extensions

  • Federal Housing Finance Agency (FHFA)
  • Veterans’ Administration (VA)
    • Moratorium on Foreclosure: The VA has extended a moratorium on foreclosure (initiation of foreclosure and completion of those in process) on properties secured by VA-guaranteed loans through December 31, 2020.
    • Moratorium on Evictions: The VA also extended an evictions moratorium on properties secured by VA-guaranteed loans, including those loans currently in VA’s Real Estate Owned portfolio, through December 31, 2020.

On the state level:

  • Illinois:
    The state of Illinois plans to give $300 million in rent and mortgage grants this fall to people impacted by the COVID-19 pandemic, offering one-time grants of $5,000 for tenants and $15,000 for homeowners. The programs, administered by the Illinois Housing Development Authority, are funded through federal money from the Coronavirus Aid, Relief and Economic Security (CARES) Act passed earlier this year. Further information on applications can be found at, eviction filings are on hold through at least September 19, 2020 as outlined in Governor J.B. Pritzker’s Executive Order. Chicago also passed a new eviction protection ordinance that includes more stringent requirements for Chicago landlords to file new eviction cases. Caution should be used prior to initiating an eviction action statewide after checking with local Court orders and guidelines once the moratorium ceases.
  • Missouri:
    While there is no longer a state-wide moratorium in place for Missouri, the Missouri Supreme Court allows the lower district courts to exercise their discretion in determining whether evictions should proceed in their districts.

Regionally, the City of St. Louis and St. Louis County are the only courts in Missouri that have halted evictions.

For further questions, please do not hesitate to reach out to one of our corporate attorneys.

For additional COVID-19 related information, go to our Coronavirus/COVID-19 Resource Center.

Posted by Attorney Hannah E. Mudd. Mudd is a member of Danna McKitrick’s transaction team. As a member of the team she advises clients on a variety of corporate and business transactions including entrepreneurial, real estate, banking, employment, and corporate formation and governance matters.

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