Summary of Federal and State Developments Pertaining to Mortgage Loan and Lease Enforcement in Response to COVID-19

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Since March 13, 2020, the U.S. has been operating under a declared state of emergency in response to the spread of COVID-19, with many state and local governments issuing their own emergency rules and regulations designed to help slow the spread of the virus. Though necessary, it is widely acknowledged that these emergency rules and regulations have adversely affected economic activity. In response to these adverse impacts, various branches of the federal government and many state governments have enacted legislation and issued executive and other orders (“EOs”) to help mitigate these economic impacts and to assist businesses and individuals struggling with the COVID-19 pandemic. Some state regulatory agencies have recently issued guidance or regulations in an effort to facilitate financial institutions’ ability to support residential and commercial borrowers and the greater economy. In other cases, state regulatory agencies re-emphasize previously enacted EOs, without imposing additional requirements.

The attached federal and state-by-state survey provides a summary of guidance, enacted or proposed legislation, promulgated regulations, EOs, and state actions taken in order to provide mortgage relief measures in response to the COVID-19 pandemic. The below survey focuses on mortgage relief, in the form of forbearance and otherwise (e.g., court closures or moratoriums), particularly in the commercial context, although it must be noted that this information is changing on a rapid, seemingly minute-by-minute, basis. Actions pertaining to residential mortgages have also been included in the summary, as the federal, state, and local governments seek to provide protection to residential borrowers, seemingly motivated, at least in part, by a recognition of the impacts of reported furloughs and layoffs and a rapid and substantial increase in unemployment insurance applications. In connection with these protections, some states have implemented mortgage relief measures for residential borrowers affected by the COVID-19 pandemic, while other states are halting evictions and foreclosures but still requiring mortgage and rent payments to be made. A common theme among those states that have promulgated relevant EOs or the like is that the enacted emergency measures are in flux and will likely be revised over time.

Jurisdictions which currently have a policy addressing loan forbearance relief for either residential or commercial borrowers are highlighted in grey. We again note that, while this is a good faith attempt to provide a relatively current snapshot, the pace at which these emergency rules, regulations, advisories, other forms of guidance, and the like has been moving is such that there may already have been changes or additions to the information provided herein. That said, we hope that this provides a good starting point and is useful in such regard. We would certainly, and in all events, recommend that you confirm with legal counsel before acting on any such information provided.

These materials have been prepared by Seyfarth Shaw LLP for informational purposes only and do not constitute legal advice.