Residential Mortgage and Lease Relief

On March 18, 2020 the U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency issued a sixty-day moratorium on all foreclosures on and evictions from homes with either FHA-insured or Fannie Mae or Freddie Mac – backed mortgages. The language of the announcement from HUD (FHA loans) and from the FHFA (Fannie and Freddie loans) are linked below.

On March 23, 2020 the FHFA extended the moratorium to mortgages on multi-family homes, on the condition the homeowner agreed to hold off on evictions of tenants in the home.

Renters may benefit from this moratorium by reaching out to their landlords and inquiring whether the property owner is subject to the moratorium and will take advantage of the sixty-day break. Fannie Mae and Freddie Mac are the largest mortgage backing companies in the country, so there is a decent chance a renter’s landlord has a federally-backed mortgage.

Governor Ducey’s most recent Executive Order (EO 2020-14) regarding postponement of evictions will directly apply to Arizona renters. Unless a court determines on motion of the parties otherwise, the order delays enforcement of eviction actions against renters when one of the following circumstances exists:

1. The tenant is required to be quarantined because of a COVID-19 diagnosis.
2. The tenant is ordered by a licensed medical professional to self-quarantine based on “symptoms as defined by the Centers for Disease Control and Prevention” (I assume this means COVID-19 Symptoms, but the order does not say that).
3. The tenant is required to be quarantined based on someone in the home being diagnosed with COVID-19.
4. The tenant demonstrates they have “a health condition, as defined by the Centers for Disease Control and Prevention, that makes them more at risk for COVID-19 than the average person.”
5. The tenant suffered a “substantial loss of income resulting from COVID-19,” including job loss; reduction in compensation; closure of place of employment; obligation to be absent from work to care for a home-bound school-age child; or other pertinent circumstances.

If a tenant meets any of the above criteria, they must notify their landlord in writing and provide any available supporting documentation. They must also “acknowledge that contractual terms of the lease remain in effect.” The order does not relieve a tenant from the obligation to pay rent or otherwise comply with their other obligations under a tenancy.

EO 2020-14 also prohibits landlords from interpreting a health and safety provision of a contract to include COVID-19 as a reason for termination of a lease or rental agreement.  

The language of these statements and Orders are available at:

https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_042

https://www.fhfa.gov/Homeownersbuyer/MortgageAssistance/Pages/Coronavirus-Assistance-Information.aspx

https://azgovernor.gov/sites/default/files/eo_2020-14_0.pdf

Can AWD LAW help me?

AWD LAW’s Kate Mahady practices in the areas of bankruptcy and debt relief. She is available to answer your questions. Reach her at KMahady@awdlaw.com or (928) 774-1478.