Eviction and Foreclosure Moratorium – Not for everyone

As the Coronavirus continues to wreak havoc globally the US economy has taken repeated hits ending a nice run of financial gain and strength. As the pandemic continues to ravage indiscriminately we are faced with shuttered businesses, overflowing hospitals and escalating job losses.

Last week, March 18th to be exact, the President rolled out a moratorium on evictions and foreclosures that gave breathe to those worried about loosing their homes in the wake of chaos. https://thehill.com/homenews/administration/488227-trump-orders-hud-to-suspend-evictions-and-foreclosures

The moratorium applies ONLY to FHA backed loans. Home owners who used an FHA financing platform for their home purchase absolutely have a little room to breathe, though the extent is questionable.

Those who financed conventionally, or any program outside of FHA, do not have the same relief as those loans are not secured by HUD (Housing and Urban Development). FHA is typically used by first time buyers, residential home buyers for their primary residence, and medium to lower income buyers.

Investment properties (rental units) are most often financed via conventional loan programs as they are not the primary residences of the buyer(s). In fact, rarely will a rental unit be an FHA loan. It’s either conventionally financed or cash paid properties. In those instances, the moratorium does not apply to those property owners, thus the tenants. While the moratorium is a great start to helping some in need during the crisis, it falls far short of helping most individuals facing financial challenge.

Thankfully, many lending institutions are individually placing moratoriums on their loans offering the same protections. Bank of America, BBVA, Capital One, JPMorgan Chase, Citi and Wells Fargo are just a few who are suspending any foreclosure activity and offering some assistance to mortgage holders.

If you are a property owner, it is your responsibility to reach out to your lender to determine what they can offer you to protect your property during this time. If you are a tenant, you must reach out to your landlord to find out if there are any options available for rent reduction or deferral.

Please do not read a few headlines and assume you’re covered. That is simply not the case.

Luck favors the prepared, and the informed.

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