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Home Mortgages and Leases in the Coronavirus Pandemic

April 27, 2020

By
Thomas E. Rutledge
Member, Stoll Keenon Ogden PLLC
(502) 560-4258
thomas.rutledge@skofirm.com

You and your employees may have concerns about paying home mortgages and rent in the midst of the coronavirus pandemic. These concerns are entirely understandable. While enhanced unemployment insurance or participation in a Paycheck Protection Program loan may provide some comfort once those funds are delivered, for many they are not yet funds in hand. Be aware that there are federal and state efforts underway to mitigate the effects of the current crisis.

Home Mortgages

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act provides that if you are having trouble paying your federally-insured mortgage due to the coronavirus pandemic, you may request a 180-day forbearance, and may thereafter request an extension of 180 days.

With respect to mortgages that are not federally insured, the Consumer Finance Protection Bureau and other federal regulators are encouraging lenders to work with borrowers on forbearance and modification of mortgages.

Regardless of whether your mortgage is federally insured or not, the first step is to reach out to your loan servicer to initiate a discussion. The servicer’s phone number will be on your monthly mortgage statement. Based upon public reports, it is taking significant time to get through to the servicer representatives; imagine the number of calls they are receiving. That being the case, you may want to look into initiating the discussion by email. Again, your mortgage statement will have that information. Failing that, check the servicer’s website.

Click here to access the website of the Consumer Finance Protection Bureau addressing these and similar matters.

Evictions

The Department of Housing and Urban Development, as of March 18, has directed that all foreclosure and eviction proceedings for single family homes with federally insured mortgages are suspended for sixty days.

There is a similar provision in the CARES Act. Effective as of March 27, if the landlord’s mortgage on the property is federally insured, a tenant cannot be evicted for non-payment of rent during the 120-days after March 27 (i.e., late July), and after that period runs, a tenant cannot be required to vacate until they receive a 30-day notice to vacate.

Even if the property is not subject to these protections because it is not mortgaged, there are state-level protections. For example, the Kentucky Supreme Court has issued a ruling that eviction proceeding may not be filed until 30 days after the current emergency declaration is lifted. Also, as Kentucky’s civil courts are currently closed except for extraordinary matters, currently pending eviction actions will not proceed until after the state of emergency is lifted. Indiana Governor Holcomb has issued an executive order to the effect that eviction proceedings will not proceed while the state of emergency is in effect.

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Stoll Keenon Ogden understands that these are trying times for our clients and our country. Our firm operations have continued uninterrupted and our attorneys are equipped to serve as we always have – for over 120 years.

Attorneys with Stoll Keenon Ogden PLLC’s Real Estate, Rental and Leasing practice group provide efficient legal assistance to a spectrum of clients including borrowers, lenders, buyers, sellers, landlords and tenants within the real estate industry.

Please also be sure to consult the Stoll Keenon Ogden Coronavirus Resource webpage for additional articles and information related to the latest information on new laws and directives enacted by federal, state, and local governments in response to the Coronavirus pandemic.