Update: the Massachusetts Foreclosure & Eviction Moratorium Just Ended – What you need to know

Friends,

As you may recall, earlier this year we alerted you to the fact that Governor Baker signed into law a new Act imposing a temporary moratorium on certain evictions and foreclosures in Massachusetts in response to the COVID-19 Emergency. Our summary of that law, including its scope and application, can be reviewed in our April 21, 2020 newsletter by clicking here.

Today we are writing to provide you with an important update about the expiration of the Massachusetts eviction and foreclosure moratorium, as well as additional information about alternate resources that may be of assistance to eligible homeowners, landlords, and tenants who are experiencing financial hardships as a result of the pandemic.

As you may have heard in the news, the Massachusetts eviction and foreclosure moratorium expired as of midnight on October 17, 2020. In its place, Governor Baker has recently announced the establishment of alternate state-based resources for both landlords and tenants in an effort to assist residents of the Commonwealth who are verifiably unable to pay their rent or mortgage as a result of COVID-19 and its impact on our economy. More information about this expanded state-based assistance is included below.

The termination of our state’s eviction moratorium means that the more limited federal eviction moratorium put in place by the Centers for Disease Control and Prevention (CDC) is now the only eviction moratorium in effect in Massachusetts.  Importantly, the CDC Moratorium only applies to evictions based in whole or in part on non-payment of rent. It does not apply to evictions based on other causes or on foreclosures.

The expiration of the Massachusetts eviction moratorium is expected to result in a very large influx of summary process (eviction) cases being filed in the Massachusetts Housing Courts. In an effort to process the backlog of cases filed before the moratorium went into effect, and to deal with the expected increase in new cases, the Housing Courts have implemented a new two-tier process for handling eviction cases.  In essence, the first tier will involve an informal mediation and informational session scheduled with one of the Court’s housing specialists. This first tier process is intended to help both landlords and tenants understand what resources may be available to them to assist with the payment of arrearages and also to determine whether a compromise can be reached informally that will allow the tenant to avoid displacement from housing during pandemic-related financial hardships. In some cases, landlords may be able to apply for rental assistance on behalf of their tenants so that landlords receive the rent that they depend on to pay mortgage payments on their rental property. If this first-tier process does not resolve a particular case, then the matter moves forward to the second-tier process that involves a trial. While the official guidance suggests that a trial will be scheduled for a date no less than two weeks after the termination of tier-one proceedings, it is very likely that the volume of pending cases will result in longer delays in receiving a trial date.

For more detailed information on how the Courts plan to process eviction actions while also evaluating whether the CDC moratorium and/or other resources apply in a particular case, please visit the Trial Court’s website addressing Frequently Asked Questions about the CDC eviction moratorium order by clicking here.

As noted above, the CDC eviction moratorium is not applicable to homeowners or owner-occupied rental properties facing foreclosure. That said, eligible property owners may be able to obtain mortgage assistance such as forbearance and grants through alternate programs in Massachusetts such as the Residential Assistance for Families in Transition (RAFT) program and the Emergency Rental and Mortgage Assistance (ERMA) program. Additional forbearance options may also be available through programs authorized under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. These and other programs are further outlined below:

Massachusetts Emergency Rental and Mortgage Assistance Programs

In Massachusetts there are essentially four primary sources of potential assistance for income-eligible renters and homeowners encountering financial hardships as a result of the COVID-19 Emergency:

• Residential Assistance for Families in Transition (RAFT)
• Emergency Rental and Mortgage Assistance (ERMA)
• Emergency Rental Assistance Programs through local cities and towns, and
• Private assistance programs, many of which are provided directly through mortgage lenders/servicers or through community-based entities that have established emergency funds to assist people within specific cities, towns, or regions of the state.

While each program will have its own eligibility criteria, the following is a list of documentation that will be helpful to have on hand when applying for assistance:

• Identification documents for the head of household and household members;
• Income documentation for the last 60-90 days for all household members that are 18 years of age or older;
• Official documentation of the amount of rent or mortgage payments currently in arrears. This is usually obtained through a letter from a landlord or through a notice or account statement from a mortgage lender/servicer.
• Documentation of all increased expenses and/or decreased income experienced during the time that the applicant has been unable to pay some or all of their rent or mortgage payments;
• Documentation, to the extent that it may exist, supporting the connection of these increased expenses and/or decreased income with the COVID-19 Emergency;
• A copy of the applicable lease or rental agreement if the applicant is a renter, or a copy of the applicant’s most recent mortgage statement if they are a property owner;
• For property owners seeking relief, they will also likely need documentation of their current ownership of the property at issue.

More detailed information about these programs and how to apply can be found at the following websites:

Commonwealth of Massachusetts Resources for Renters, Homeowners, and Landlords:  https://www.mass.gov/covid-19-getting-help-with-housing-costs

Regional Housing Network of Massachusetts:
https://www.masshousinginfo.org/difficulty-paying-your-rent-or-mortgage

Federal Assistance through CARES Act Mortgage Forbearance Programs

Importantly, mortgage forbearance options under the federal CARES Act is only available to homeowners with federally-backed or Government-Sponsored Enterprise (GSE) backed mortgages.  The U.S. Consumer Financial Protection Bureau has summarized the two types of potential relief available under the CARES Act as follows:

• “First, for many federally or GSE-backed loans, your lender or loan servicer may not foreclose on you until at least December 31, 2020. Specifically, the CARES Act and the guidance from the GSEs, the FHA, the VA, and the USDA, prohibit lenders and servicers from beginning a judicial or non-judicial foreclosure against you, or from finalizing a foreclosure judgment or sale. This protection began on March 18, 2020, and extends through at least December 31, 2020.”
• “Second, if you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days. You also have the right to request and obtain an extension for up to another 180 days (for a total of up to 360 days). You must contact your loan servicer to request this forbearance. There will be no additional fees, penalties or additional interest (beyond scheduled amounts) added to your account. You do not need to submit additional documentation to qualify other than your claim to have a pandemic-related financial hardship.”

More detailed information concerning the federal CARES Act forbearance options is available from the U.S. Consumer Financial Protection Bureau’s website, which can be accessed here.

Whether you are a lender, a property owner, or a tenant, we stand ready to assist you in finding help during these unprecedented times.  If you have any questions or need assistance, please do not hesitate to contact us.