COVID-19-related Forbearance Options Including Foreclosure and Eviction Moratoriums

As we each come to grips with the immediate changes to our daily lives brought on by COVID-19, the question of what happens if/when people can no longer pay their rent or mortgage is on the minds of tenants, landlords, lenders, and borrowers alike.

As unemployment numbers continue to spike across the country, many states (including Missouri and Illinois), individual lending companies, and banks have announced forbearance, foreclosure, and eviction changes in response to COVID-19. Banks and lenders are taking it upon themselves to aid customers struggling due to COVID-19 in addition to the assistance provided by local, state, and federal governments. If you, your business, or your property fall within this category you should contact your individual lender or bank to determine if such resources are available to you.

The federal government and some state and local authorities have put temporary emergency restrictions on foreclosures and evictions in place. Some directives do not make a distinction between commercial and residential foreclosure proceedings.

National Directives:

• HUD and FHA: The U.S. Department of Housing and Urban Development issued a foreclosure and eviction moratorium on FHA-insured single-family mortgages and home equity conversion (reverse) mortgages. The 60-day period runs from March 8 to mid-May 2020.
  • Foreclosures: All new foreclosures and the completion of any foreclosures already in process are halted.
  • Evictions: All evictions from FHA-insured single-family properties cease.
• FHFA (Fannie Mae and Freddie Mac):
  • The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac and backs the mortgages of 28 million homeowners, ordered a suspension of all foreclosures and foreclosure-related evictions for at least 60 days beginning on March 18, 2020.
  • The FHFA announced earlier in March that Fannie Mae and Freddie Mac would provide payment forbearance to borrowers for a mortgage payment to be suspended for up to 12 months due to hardship caused by COVID-19.Additionally, Freddie Mac has implemented a program offering relief to multi-family landlords with  Freddie Mac Multi-family Fully Performing Loans.
    • Landlords can defer loan payments for 90 days by showing hardship due to COVID-19.
    • Landlords are not allowed to evict any tenant based on nonpayment of rent during the forbearance period.
  • HUD and Public Housing: HUD may take steps soon to protect low income individuals in public housing.
  • Federal District Courts: Many federal district courts (and some state courts) have suspended nonessential hearings which would presumably bar foreclosure hearings. This decision has been made by each individual district.

Missouri Foreclosures and Evictions Directives:

• State-wide Directives:
  • At this time, no executive orders in Missouri restrict commercial or residential foreclosures or evictions on a statewide basis.
• Local and County Directives:
  • Jackson County (Kansas City) enacted an eviction moratorium lasting through April 18.
  • The City of St. Louis issued a moratorium that no water shutoffs can be made until after May 15.
• State and Local Court Directives
  • Effective March 24, Louis City Circuit Court continued all non-essential hearings until at least April 17 unless conferences in current cases could be hear by teleconference.
  • The Louis County Circuit Court announced that foreclosures and evictions would likely not be pursued by the county until it is safe for their employees to do so as of March 20.
  • The Missouri Supreme Court entered an order suspending “all in-person proceedings in all appellate and circuit courts – including all associate, family, juvenile, municipal, and probate divisions” from March 23 through April 17, 2020. The order does not address evictions or foreclosures, but the Court is likely to delay such proceedings.
  • Individual judicial districts may implement additional restrictions to ensure the safety of their employees and the general public.

Illinois Foreclosures and Evictions Directives:

• State-wide Directives:
  • At this time, no executive orders in Illinois restrict commercial foreclosures or evictions on a statewide basis.
  • Enforcement of residential evictions are suspended until April 30, 2020.
  • The State of Illinois has issued a moratorium on utility shutoffs, specifically for energy, telecom, and water and law enforcement was ordered to not enforce eviction orders until May 1 on a statewide basis.
• Local and County Directives:
  • The Cook County (Chicago) Sheriff’s Office announced on March 14 that they will “suspend all court-ordered evictions for the next 30-days.” This announcement does not clarify whether it applies to commercial or residential evictions, or both.
• State and Local Court Directives
  • Cook County imposed a local eviction moratorium through April 14.
  • DeKalb and Kendall Counties also have local eviction moratoriums such that they will not hold hearing until after April 17.
  • The 10th Judicial Circuit has postponed all eviction court cases until April 17 in Peoria, Tazewell, Marshall, Putnam, and Stark Counties.
  • Additional updates for specific counties can be determined as needed by contacting the relevant court clerk.
  • The Illinois Supreme Court ordered on March 17 that “[a]ll non-essential court matters and proceedings should be continued or, where possible, conducted remotely via telephone or video, or other electronic means.” While this does not specifically address evictions or foreclosure proceedings, it will most likely at least delay them.

For information on  available programs or changes under the CARES Act, go to CARES Act Offers Forbearance Options Including Residential Foreclosure and Eviction Moratoriums

If you have any questions about your options under the available relief and loan packages, please do not hesitate to contact our office and arrange a time to speak with one of our real estate or banking attorneys.

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