Upon Certain Mortgage Foreclosures and Evictions

Today, March 27, 2020, the President enacted H.R. 748, more commonly known as the “coronavirus stimulus package,” “coronavirus relief bill” or “coronavirus stimulus bill,“ into law. Section A entitled the “Coronavirus Economic Stabilization Act of 2020” (the “Act”) contains provisions which affect mortgage foreclosures and tenant evictions where the property is subject to a federally backed mortgage or multi-family mortgage loan. How do these provisions of the Act impact private investors and multi-family housing providers?

Federally Backed Mortgage and Multi-Family Mortgage Loans

Federally backed mortgage loans are secured by a lien on a residential property and which are made or insured by the federal government. They also include loans made or insured as part of a HUD housing or urban development program or those which Fannie Mae or Freddie Mac purchase or securitize.

Federally backed multi-family mortgage loans are the same as federally backed mortgage loans but are for residential properties that are designed for families of five (5) or more.

Mortgage Foreclosure Moratorium on Federally Backed Mortgage Loans

The Act prohibits servicers of federally backed mortgage loans from initiating the foreclosure process. This prohibits not just the filing of a foreclosure complaint but also serving notice and proceeding with current, pending litigation.  For all pending foreclosure litigation, the plaintiff is unable to seek entry of a judgment for foreclosure and sale, enforce a foreclosure and sale judgment by auctioning the property for sale, or obtain or enforce an order of possession. This provision is effective 60 days from March 18, 2020 and does not apply to abandoned or vacant properties.

To be sure, this provision only affects servicers whose loans are federally backed and has no impact upon foreclosure of liens related to assessments or common expenses.

Assistance for Multifamily Borrowers Who Have Federally Backed Mortgage Loans

The Act recognizes that multifamily borrowers with federally backed multifamily mortgage loans (“Multifamily Borrowers”) may be impacted financially due to the COVID-19 pandemic. Under the Act, Multifamily Borrowers who experience such hardship will be able to request a forbearance. However, those who receive a forbearance are prohibited from (a) initiating evictions or evicting tenants based upon non-payment of rent or other charges; and (b) charging late fees (or other fees) related to a tenant’s late rent payment. The prohibitions are effective during the term of the forbearance.

Eviction Moratorium
The Act also contains imposes a certain moratorium on initiating the eviction process to recover possession due to non-payment of rent from tenants. This applies to residential dwellings that are tenant-occupied designed for one (1) or more families and also fall under (a) a covered housing program under Section 41411(a) of the Violence Against Women Act of 1994; (2) the rural housing voucher program under Section 542 of the Housing Act of 1949; or (3) have either a federally backed mortgage or multifamily mortgage loan (“Lessors”).

The moratorium is effective as of today, March 27, 2020 and is effective for another 120 days. During the moratorium, Lessors are prohibited from serving notices of termination of tenancy for non-payment of rent (“Notice”). Once the moratorium has expired, Lessors are required to afford tenants at least 30 days to vacate after service of the Notice. This provision supercedes the terms of the lease or state or local law. Additionally, Lessors are prohibited from filing eviction actions predicated upon non-payment of rent or other charges during the moratorium.

Please feel free to contact our office for counseling and advice on the Act.


By: Mohit Mehta

The Families First Coronavirus Response Act (FFCRA) was signed into public law on March 18, 2020, as a way to legislate duties, rights and responsibilities in the public and private sector while the nation carries on through the COVID-19 pandemic. As employers are forced to close businesses and employees take medical leaves of absence from work, the FFCRA lays out employer and employee duties and responsibilities in the “Emergency Family and Medical Leave Expansion Act” (EFMLEA) and the “Emergency Paid Sick Leave Act” (EPSLA). The EFMLEA expands the scope of the Family and Medical Leave Act of 1993 (FMLA), where employees may take 12 weeks of leave for medical reasons due to the COVID-19 pandemic without risk of losing their job. The EPSLA grants employees 2 weeks of paid sick leave due to the COVID-19 pandemic, regardless of the length of their employment.


Overview of Legislation:

Small businesses and organizations with fewer than 50 employees are exempt from the requirements of the EFMLEA when the imposition of such requirements would jeopardize the viability of the business. Additionally, the provisions in the EFMLEA apply only to employees employed for at least 30 calendar days by the employer from whom leave is requested, and employers with 50 or more employees for each working day during the last 20 workweeks. The EFMLEA expands on the Family and Medical Leave Act of 1993 (FMLA), which lays the groundwork for which employees may take leave from their employment for up to 12 weeks (or 26 weeks in the case of them being a servicemember) if they are need of medical care, or to care for a family member that is in need of medical care, without the risk of the employee losing their job. The EFMLEA expands the FMLA, where employees are able to take 12 (or 26) weeks of leave from employment without the risk of losing their job, if they are required to do so under the new federal, state, and local rules in connection with the COVID-19 pandemic. Accordingly, the employee may take the 12 weeks given under the FMLA to recover or help their child recover from the COVID-19 pandemic (if schools and child-care centers are closed due to the new federal, state, and local rules in connection with the COVID-19 pandemic), without the risk of losing their job, under the new provisions in the EFMLEA. Furthermore, the employee can elect to include accrued vacation days, sick days, and personal days for the first 10 days of leave under the EFMLEA; after the 10 day period, the employer shall provide paid leave for the employee. However the amount of money that employers are to pay employees is not to exceed $200 per day and a $10,000 maximum.

Employer and Employee Duties:

Employees must give notice as is practicable to employers when medical leave is foreseeable. If the employee’s position is taken when the employee comes back to work, the employer must make every reasonable effort to restore the employee to a position equivalent to the position the employee held prior to taking leave. If the restoration fails, the employer must contact the employee if an equivalent position opens up within one year.


Overview of Legislation:

The EPSLA applies to any employer in the private sector with under 500 employees. Under the provisions of the EPSLA, employers must give their employees paid sick leave under the Act regardless of how long the employee has been employed by the employer. Additionally, employers may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time granted in the EPSLA. The EPSLA specifically lists that employers are required to give employees paid sick leave only to the extent that the employee is unable to work (or work remotely) because:

  • The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to an order as described in numeral (1) or has been advised as described in numeral (2);
  • The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions;
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Accordingly, full time employees are entitled to 80 hours of paid sick leave and part-time employees are entitled to a leave amount equal to the number of hours the employee works over a 2-week period. Once an employee comes back to work, the employee is afforded no more sick leave under the Act. Lastly, employers are required under the FFCRA to post a copy of the language used in the Act at work; “model language” that satisfies this requirement can be found below:

Paid Sick Leave Calculation:

The EPSLA lists two payment restrictions for employers based on the reason the employee takes leave. For reasons 1-3 above, paid sick time is not to exceed $511/day and a maximum of $5110 total; for reasons 4-6 above, paid sick time is not to exceed $200/day and a maximum of $2,000 total. Additionally, when employees are taking paid sick leave for reasons 4, 5, and 6, their compensation will be 2/3 of their regular rate of pay. For part-time employees or employees with varying schedules, employers should calculate the employee’s paid sick leave hours to a number equal to the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including hours for which the employee took leave of any type. If the employee did not work during the last 6 months, paid sick leave should be based on a reasonable expectation on the number of hours per day the employee typically works.

If you any questions regarding the foregoing please contact our office to discuss.   Remember this portion of the recent federal legislation addresses leave taken due to one of the enumerated reasons and not due to lack of work or closure of a business. 

This article is being provided for informational purposes only.  This article does not constitute legal advice on the part of Keay & Costello, P.C. or any of its attorneys.  No client or any other individual or entity should rely on this article as a basis for any action or actions without confirming the advice.  If you would like legal advice regarding any of the topics discussed in this article and/or recommended procedures for your entity or business going forward, please contact our office.