By Ryan J Moore
Unlike the housing crisis of the mid-2000s, federal agencies, state governments, and private lenders are being voluntarily proactive in responding to the current pandemic.
On March 25, the Tennessee Supreme Court issued an order suspending all in-person court proceedings and prohibiting court officials from taking any action to evict a tenant from a residence. The court issued a subsequent order that extends this relief to tenants through June 5.
This order applies to residential dwellings only. Specifically, the order prohibits judges, court clerks and any other court officer from taking any action to enforce an eviction or other displacement of a tenant from their residence based on a failure to pay rent during this emergency.
Nothing in the order relieves a tenant’s obligation to pay the rent owed. There is no legislation or governmental order declaring an official eviction moratorium at this time.
There is no state-ordered foreclosure specific relief. However, there is a federal moratorium on foreclosures until at least June 30 for Freddie Mac and Fannie Mae government backed loans.
Except for jury trials, all in-person court proceedings may commence. Courts are encouraged to continue limiting in-person contact when possible.
All deadlines set to expire during the period from March 13 through May 31 are extended through June 5.
Eviction and foreclosure suspensions, along with deferred payments on mortgages, merely delay the issue. This is not a forgiveness of rent or mortgage payments.
Once the suspension time period is lifted, both landlords and lenders are free to pursue their legal remedies. This means tenants and borrowers should be proactive in communicating with landlords and lenders during this interim to work out a payment program.
Foreclosure suspensions only apply to federally backed, single-family dwelling loans, such as those serviced by Fannie Mae, Freddie Mac and V.A. Foreclosures are suspended until at least June 30, 2020.
Borrowers facing a hardship due to COVID-19 may apply for up to 12 months of payment forbearance. This is not loan forgiveness, but rather just a deferral of payment. Payments are added on to the loan balance at the end of the term and a modification extending the note is an option. Payment is not due in full at the end of the forbearance period.
Ryan J. Moore is a local attorney with an office on Spring Street.