On April 3, 2020, Alabama Governor Ivey issued a Proclamation temporarily stopping all evictions and foreclosures in Alabama for the term of this Public Health Emergency. This proclamation does not have a definite ending date. The termination of this proclamation will be when the Governor issues an order stating the temporary bans been lifted.
There was a report from National Multifamily Housing Council (NMHC) out today that states almost a third of the renters in America had not paid this month’s rent as of April 8th. From comments and social media postings, some renters believe that this means their rent is not owed, but that is not what the Governor’s order says. People think that this means that they don’t have to pay rent or that rent is forgiven, or they don’t have to pay their mortgage payment for these months, that’s not what the Governor’s proclamation is stating.
Proclamation Does Not Forgive Rent/Mortgage Payments
In fact, the proclamation specifically states that “Nothing in this Section shall be construed as relieving any individual of the obligation to pay rent, to make mortgage payments, or to comply with any other obligation that an individual may have under a rental agreement or mortgage.”
The proclamation states that temporarily you cannot be evicted from a rental house, an apartment, or a trailer. The proclamation states if you own your home and there is a mortgage on the property, temporarily, the bank or mortgage company cannot foreclose on the property. Unless you make arrangements with the landlord, bank, or mortgage company, the full amount of the rent or mortgage payments not paid during this temporary reprieve will still be due when this proclamation is lifted and may be required to be paid immediately. It is essential that if you start to have financial problems, an example would be losing your job. Which we address in another posting on the AaronLawFirm.com blog What to Do If you Lose Your Job. I want to make sure people understand that this proclamation does not forgive any debt that you owe.
If you start to have financial problems, you need to go and talk to your landlord to make arrangements to lower the rent, with the understanding that you would catch up the deficit after a certain period of time.
If you are a landlord and you have someone that is not paying rent, this means temporarily you cannot evict somebody through the court. One of the issues lawyers deal with is landlords deciding that they will, as we call in the legal industry, “self-help evictions”. Usually means that the landlord locks people out the hours, shut off the utilities, or just empty the house of the tenant’s belongings. When a landlord does a “self-help eviction”, the tenant can go to court, and the Judge will issue an emergency order for the landlord to let them back into the property. They can be awarded by the court a minimum triple the monthly rental payments plus other damages. You cannot do “self-help evictions”. If you have a tenant who you believe is not paying because they just don’t want to pay, you need to serve the Notice of Termination as you usually do, so when this order is lifted, then you can go to court and have the tenant evicted.
If you start to have financial problems and you have a mortgage, call the bank or mortgage company that you are making your mortgage payments to and see if they have a forbearance program. Here is a list of banks that have forbearance programs, review, and see if your current mortgage company is listed. It is vital that you check your bank or mortgage company website to see if they have any announcements regarding any programs for forbearance arrangements because of the coronavirus crisis.
If your mortgage is a government-backed or government-insured loan, there are forbearance programs that you can apply for. Here are the lookup sites for Fannie Mae and Freddie Mac. Those are the loans that qualify under the CARES ACT for the forbearance of payments on the mortgage. If your Mortgage is backed by VA, FHA, or USDA, look at their website to determine what programs are available to you.
It is crucial that you do some investigation and know what programs are available to you before you call the bank or mortgage company that currently has your loan.
What is a Mortgage Forbearance Agreement? It is an agreement between the lender and a borrower who is behind on their mortgage payments. The lender agrees not to foreclose on the mortgage for a certain period of time, and the borrower agrees to a plan to bring the payments current. A typical forbearance agreement has reduced payments for a period of time and then returns to the regular payments amount, or takes the past due payments and puts them to the end of the loan and shows the loan as current.
If you have any questions, give us a call at the Aaron Law Firm. It’s (205) 685-8383, or you can email me at JohnAaron@AaronLawFirm.com.
Be safe. Keep your family safe.