Korde & Associates: MA Foreclosure and Eviction Moratorium

• By: ALFN
• On: 04/21/2020 11:51:23
• In: COVID-19

In response to the current COVID-19 pandemic, on April 17, 2020, the Massachusetts legislature passed House Bill 4647, imposing a 120-day moratorium on evictions and foreclosures, subject to an exception for vacant and abandoned property and was signed by the Governor on April 20, 2020 (the “Act”). The Act also imposes specific forbearance requirements on mortgagees, related to requests from borrowers facing economic hardship as a result of COVID-19.
 
Massachusetts Foreclosures

• Foreclosure Moratorium on owner-occupied, 1-4 family residential properties for 120-days, or 45-days after the expiration of the Massachusetts COVID-19 State of emergency, whichever is sooner.

  • The governor has been granted the power to extend the moratorium in increments up to 90-days, but in no event shall such extension be later than 45-days after expiration of the declared state of emergency due to COVID-19.

• Moratorium prohibiting the following actions related to foreclosure on applicable properties:

  • Initiation of judicial or non-judicial foreclosure;

  • Filing a complaint to determine military status under the 50 USC §3901 , et seq.;

  • Publication of a foreclosure sale notice pursuant to MGL c. 244 §14;

  • Exercise of a power of sale

  • Exercise of a right of entry

• Vacant or abandoned properties are exempt from the applicable moratorium

Due to the variable nature of the length of the moratorium, the Firm will be cancelling all sales currently scheduled on occupied properties.
 
Foreclosures on vacant and abandoned properties are permitted, but due to the current stay at home order in place, the ability to conduct a commercially reasonable foreclosure sale during this time is questionable. Our office will be able to schedule sales but recommends that any sale not take place until the expiration of any applicable stay at home order is lifted. The Massachusetts stay at home order currently runs through May 4, 2020, subject to any further extension.
 
Massachusetts Evictions

• All non-essential evictions resulting from a foreclosure sale are stayed for a period of 120-days, or 45-days after the expiration of the Massachusetts COVID-19 State of emergency, whichever is sooner.

• The governor may postpone such period, in increments of up to 90-days, but for not more than 45-days after expiration of the Massachusetts COVID-19 State of emergency

• All of the following actions are prohibited until expiration of the moratorium:

  • Sending any  notice, including a notice to quit, requesting a tenant of a residential property vacate the premises.

  • Terminate tenancy

Massachusetts Forbearance Requirements
The provisions of the Act also include requirements related to mortgage forbearance, during the effective dates of the Act. The Act requirements related to forbearance requests shall be in effect for a period of 120-days, subject to any extension declared by the Governor of Massachusetts,  or 45-days after the expiration of the Massachusetts COVID-19 State of emergency, whichever is sooner.

The forbearance requirements applicable to owner-occupied 1-4 family properties are as follows and we recommend that you make any necessary changes internally to ensure compliance with these requirements:

1. A creditor or mortgagee shall grant a forbearance to a mortgagor of a mortgage loan if the mortgagor submits a request to the mortgagor's servicer affirming that the mortgagor has experienced a financial impact from COVID-19.

                                                               i.      The request must be made prior to expiration of the Act.

2. The forbearance shall be for not more than 180 days.

3. No Fees, penalties or interest beyond the amounts originally scheduled and calculated shall accrue during the period of forbearance granted under this subsection.

4. A payment subject to the forbearance shall be added to the end of the term of the loan unless otherwise agreed to by the mortgagor and mortgagee.

5. Nothing in this subsection shall prohibit a mortgagor and mortgagee from entering into an alternative payment agreement for the payments subject to the forbearance.

6. The mortgagee shall not furnish negative mortgage payment information to a consumer reporting agency related to mortgage payments subject to forbearance under this act.

Please contact us with any questions or concerns.
 
Julie Ranieri, Partner, jranieri@kordeassociates.com
Erika Hoover, Associate, ehoover@kordeassociates.com