When the rent or mortgage came due at the beginning of the month, many across the U.S. didn’t have the money to pay it. In order to be legally evicted or foreclosed upon, there are a series of things that needs to happen — a notice to the tenant to vacate, the tenant is served legal paperwork, the tenant is allowed to respond, the court then denies or grants the eviction, and then a writ is posted.
But both the state of Florida and the federal government have taken steps to block parts of this process from happening.
On March 24, the Florida Supreme Court suspended clerk of the courts’ ability to issue writs, and also closed the courts to non-essential proceedings. This essentially pauses evictions through April 17. Then, on March 27, the federal government created a moratorium on evictions for nonpayment of rent in properties with federally backed mortgages (FHA, Fannie Mae, Freddie Mac, etc.) through July 24.
The federal moratorium applies to about 80% of all mortgaged properties, but not all.
“Call, call, call,” said Marathon Realtor and developer Joshua Mothner. “The first thing anybody who can’t pay the rent should do is get on the phone. Whoever you make your payment to, that is who you need to call.”
Then ask what your options are.
For homeowners, Freddie Mac is offering mortgage forbearance for up to 12 months — that means the homeowner has the missed payments tacked onto the “back” of the loan.
“If you have a 30-year fixed mortgage rate, your mortgage is almost surely backed by Freddie Mac or Fannie Mae,” said Jeff Smith, a longtime Keys banker, “even if the mortgage envelope has the name of another company; they have just bought the rights to service a portfolio.”
Smith said most local banks’ portfolios will offer a standard three-month deferral.
“But each bank will have their own policy,” he said.
For renters, the path forward is not so clear cut.
“It’s up to the landlord to offer relief to the tenant,” Smith said. “But a lot of landlords are working with their tenants because it is in their financial interest to do so. There is still a governing lease, however, that will need to be modified and agreed upon.”
According to nasdaq.com, the CARES act gives consumers some credit score protections. “It dictates how companies that send data to credit bureaus will report accounts for which consumers have payment accommodations in place.” Those with accommodations, who pay on time, won’t be affected negatively, the organization said.
All of the above applies to tenants and homeowners, but what of commercial property holders or leasees who can’t make the payments? According to Florida Trend, the eviction and foreclosure protections in the governor’s executive order do not extend to businesses in Florida. Businesses will be protected from eviction so long as the courts are closed to non-essential business, but no longer than that.
The Florida Keys Electric Cooperative and Keys Energy have announced they are suspending disconnections for nonpayment and offering customized payment plans. The Florida Keys Aqueduct Authority has said that, at this time, it is suspending disconnections and late fees/ penalties. Residents should continue to check back with the utilities and monitor the policies. Residents have been advised to make at least partial payments in the meantime.