Fund/Florida Underwriting Bulletin COVID-19 – CARES Act Federal Foreclosure /Eviction Moratoriums Further Extended.  Governor’s Executive Order Extended

Summary:  By Executive Order 20-211, the moratorium on residential Florida foreclosures and evictions has been extended to October 1, 2020.   Additionally, the CARES ACT moratorium on residential foreclosures or foreclosure related evictions of residential loans insured or guaranteed by FHA, VA, USDA or loans that are owned or securitized by Fannie Mae or Freddie Mac has now been extended through December 31, 2020. 

Underwriting Requirements:  As a result of the federal and state foreclosure and eviction moratoriums, until further notice, title agents are required to obtain prior written approval from  FUND Underwriting to insure title or issue a policy based on a mortgage foreclosure action where the Certificate of Title or Writ of Possession was issued after March 18, 2020, but prior to the expiration of the CARES Act moratoriums (now December 31, 2020) and/or Executive Orders 20-94, 20-121, 20-137, 20-159, 20-180, and 20-211 (collectively referred to as the “Executive Orders”), now October 1, 2020.  Title to any property that is derived through a mortgage foreclosure initiated during the effective period of the CARES Act moratoriums and/or Executive Orders may not be insurable and FUND underwriting approval is required. 

EXECUTIVE ORDER - Florida Residential Foreclosures & Residential Evictions:  Governor DeSantis issued Executive Orders, consistent with the CARES Act, which initially extended the foreclosure moratorium to ALL foreclosures and tolled residential evictions.  The Executive Orders now limit the moratorium to “final action” in residential evictions for non-payment of rent or mortgage foreclosures for failure to make mortgage payments only.  Further, the Executive Orders require that the failure to pay must relate to the COVID-19 emergency meaning “loss of employment, diminished wages or business income, or other monetary loss” impacting the ability to make rent or mortgage payments.  The Executive Orders do not waive the borrower’s or tenant’s obligation to make scheduled payments. 

Evictions of non-residential or commercial tenants are not prohibited.  Many Florida judicial circuits have also entered administrative orders which limit or prohibit foreclosure and eviction actions at this time.

CARES ACT – Moratorium on foreclosures and related evictions on federally backed residential mortgages: On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security Act of 2020 (“CARES Act”), which provides for financial relief due to the COVID-19 Virus Pandemic.  Section 4022 provides a moratorium on residential foreclosures for borrowers with federally backed 1-4 family mortgage loans and addresses the right of a homeowner to request a forbearance from payment on these loans.  The requirements only apply to federally backed mortgages which are loans insured or guaranteed by FHA, VA, USDA or loans that are owned or securitized by Fannie Mae or Freddie Mac.  The moratorium does not apply to vacant or abandoned property or private bank loans.  Under the Act, no mortgage servicer of any federally backed 1-4 family mortgage loan is permitted to do the following beginning March 18, 2020 and now further extended until December 31, 2020:

a)            Initiate any judicial or non-judicial foreclosure process;
b)            File a motion for foreclosure judgment or order of sale; or
c)            Execute a foreclosure-related eviction or foreclosure sale.

Section 4022 also allows a borrower on a federally backed 1-4 family mortgage loan to request a forbearance from payment up to 180 days with the right to request an additional 180-day extension.  Section 4023 allows a borrower on certain federally backed multi-family mortgages to request forbearance for up to 30 days with two 30-day extensions.  During the term of forbearance, a tenant cannot be evicted or charged late fees. Section 4024 establishes a temporary moratorium on eviction filings for certain single and multi-family housing.  During the above referenced period beginning on March 27, 2020, a lessor cannot initiate an eviction for nonpayment of rent.  After the moratorium period, the landlord may not evict a tenant unless a 30-day notice is provided to the tenant.

Please direct any questions you may have regarding these procedures to underwriting.