Eviction and Foreclosure, Does Shelter in Place Orders Stop this?
While America is practicing social distancing with many cities enacting mandatory shelter in place orders to slow the spread of novel Coronavirus or COVID-19, there are many who are facing the reality of not having a roof over their heads. Arizona foreclosures and evictions threaten thousands of families with homelessness amidst growing unemployment and underemployment. Although many believe the recent emergency measures taken by President Trump will stop these actions temporarily, it is not the case for all. There is also the concern of what happens once this state of emergency blows over.
Breaking down what exactly the President did may not bring comfort for many at risk for losing housing. A moratorium, or plainly put a delay or suspension of law, was issued for all FHA insured Single Family mortgages for at least 60-days. This means if a borrower was in the process of foreclosure, at risk, or comes into the risk of foreclosure or eviction and the home loan is an FHA backed loan, they will now have an additional 60-days, minimum, to stay in the home. Additionally, deadlines associated with foreclosure or eviction proceedings are extended for an additional 60-days, again only for FHA loans. These protections do not apply to any other type of loans, leaving many at risk for losing housing.
Recently, the Arizona Supreme Court granted counties the ability to decide for themselves, if they wish to suspend foreclosure and eviction actions or reschedule hearings for later dates to allow more time to remedy the situations for non-FHA cases. Many of the counties have not decided if the entire county will allow the delays; instead, they have left it up to each Justice of the Peace to decide (Justice of the peace are elected officials who serve for a four-year term. Each county has at least one Justice of the Peace).
According to reports from Arizona Central Maricopa County, the largest populated county in Arizona, is reporting 11 of the Justices have made no comment, 8 have decided to allow the delays and 7 have claimed they will continue business as usual, but will review each situation on a case by case basis. San Marcos Justice, the honorable Jay Tibshraeny has commented, “Moratoriums on evictions for only two weeks won't help renters get rid of debt they owe landlords,” which is part of the larger picture. Once the delay or suspensions are lifted, families are still in a position to lose housing. There are currently no additional or new provisions to help with avoiding foreclosure or eviction after the moratorium is lifted. However, borrowers or renters should reach out to the lender to try to work out a solution or contact local housing assistance programs to seek help in obtaining new housing.
There are options when families get behind on rent or mortgage payments. The best course of action is to act early. Seek resources to help with financial problems or HOA issues. Select Law, PLLC can help direct those struggling to valuable resources, give advice on the best approach, or provide legal representation.
Lastly, a Chapter 13 Bankruptcy could also be an option for individuals. A Chapter 13 Bankruptcy is known as a reorganization of debt. It is a 3-5-year plan where you may have the option of paying your arrears on vehicles, mortgage, rent and much more. When an individual file a Chapter 13, creditors, including landlords are forbidden from evicting a tenant without the approval of the Bankruptcy Court. Although this may not be an option for everyone, it is something to talk to your attorney about when deciding how to proceed.
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