So much has happened over the last year because of the COVID-19 global pandemic that it can be hard to keep track of all the changes. Here’s a recap of some of the more relevant changes that are still in effect that may impact CS licensees and consumers:
The Centers for Disease Controls (CDC) issued a federal eviction moratorium to temporarily halt residential evictions for nonpayment of rent. To qualify for the protection, renters must meet certain eligibility requirements and provide a declaration. This protection has been extended until at least March 31, 2021. More information can be found in this CDC FAQ and the press release announcing the extension.
In addition to the CDC protection, tenants in federally-backed properties may also have additional protections. Tenants in multi-family properties may also be covered under separate requirements that apply to certain multi-family properties that are in forbearance. Property owners of these mortgages must suspend all evictions for tenants unable to pay rent while the property is in forbearance status. Tenants renting a single-family home with loans backed by FHA, VA, USDA, and Fannie Mae or Freddie Mac may also have these eviction protections in place until at least March 31, 2021.
Additionally, specific to Washington residents, Governor Inslee issued a proclamation on March 18, 2020, prohibiting landlords, property owners, and property managers from, among other things, evicting renters, charging late fees for non-payment or late payment of rent, or increasing the rate of rent. This proclamation has been extended several times and is currently in effect through March 31, 2021. You can access the most recent proclamation.
In addition to the actions taken by the federal government and other federal agencies, DFI has issued several guidance documents requesting our licensees to continue to alleviate the adverse impact caused by COVID-19 on consumers, including forbearing mortgage payments, offering additional time to complete trial modifications, waiving late payment fees, postponing foreclosures, and proactively reaching out to mortgagors to explain the assistance being offered.
Foreclosures: The Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) prohibited new foreclosure actions and suspended all foreclosure actions currently in process for all federally-backed mortgage loans – mortgages purchased by Fannie Mae or Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA – from March 18, 2020, to May 17, 2020. This prohibition has been extended multiple times by the federal agencies and is currently in effect through March 31, 2021 (for loans backed by Fannie Mae or Freddie Mac) or June 30, 2021 (for loans insured by HUD, VA, or USDA, or directly made by the USDA). These protections do not apply to vacant or abandoned properties, however.
Forbearance requests: The CARES Act provided a right to forbearance for up to 360 days for federally-backed mortgage borrowers who are experiencing a financial hardship due to the COVID-19 emergency. The initial forbearance period is up to 180 days but a borrower can request an extension for up to an additional 180 days. The date to request forbearance depends on who backs your loan. There is no deadline at this time for Fannie Mae and Freddie Mac loans, but FHA, VA, and USDA loan borrowers must apply by June 30, 2021. In addition, borrowers with FHA, VA, and USDA loans who entered forbearance on or before June 30, 2020, may not request up to six months of additional mortgage payment forbearance, in three-month increments. For borrowers with Fannie Mae or Freddie Mac loans already in forbearance plan as of February 28, 2021, the servicer may be able to grant an additional three months of forbearance. Borrowers facing difficulties paying their mortgage because of COVID-19 should contact their servicer to evaluate their options.
Student Education Loans: On March 20, 2020, Department of Education enacted the following relief for Department of Education-held loans: 1) loan payments suspended; 2) collections on defaulted loans halted; and 3) interest rates set to 0% for 60 days. The CARES Act codified these requirements to require the relief to be provided through September 30, 2020. The requirements have been extended several times and are now in effect until September 30, 2021. For more information please visit the Federal Student Aid website.
DFI has also issued requests to all banks and credit unions to take actions to support depositors adversely impacted by COVID-19 including, waiving overdraft fees, postponing closure of impacted accounts, and proactively reaching out to customers.
Garnishment moratorium: Governor Inslee issued a proclamation on April 14, 2020, which prohibited garnishment of federal stimulus payments issued in response to COVID-19 as well as state and federal unemployment payments. This proclamation has been extended several times and is currently in effect until the termination of the COVID-19 State of Emergency or until rescinded, whichever occurs first. View the most recent proclamation.