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Supreme Court, FHFA Back Tenant and Borrower Protections

The United States Supreme Court Tuesday denied a request by a group of landlords and real estate associations to invalidate the Center for Disease Control (CDC) moratorium on evictions.

In a five-four decision, the court ruled to allow the pandemic-related stay on all evictions related to non-payment of rent to remain in place through the end of July. Both the Federal Housing Finance Agency (FHFA) and the CDC last week announced one-month extensions to foreclosures and eviction bans, respectively, that were set to expire at the end of this month.

Justice Brett Kavanaugh, who, along with Chief Justice John Roberts, sided with the liberal-leaning judges in the denial, wrote that his decision was based on the fact that the CDC moratorium ends in one month. He indicated that his decision would be different should the bans be extended any further, something the CDC has said it will not do.

"In my view, clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31," Justice Kavanaugh wrote in his opinion. He expressed agreement with the applicants that the CDC was "exceeded its existing statutory authority by issuing a nationwide
eviction moratorium."

CDC Director Rochelle Walensky signed the extension of the CDC eviction moratorium, which prevents the ousting of tenants from rental homes and apartments, and said "this is intended to be the final extension of the moratorium."

The CDC order last week went on to reiterate the CDC's initial reasoning for the moratorium, that "keeping people in their homes and out of crowded or congregate settings—like homeless shelters—by preventing evictions is a key step in helping to stop the spread of COVID-19."

The CDC moratorium last fall triggered what the Washington Post called a "flurry of lawsuits," with landlords, lobbyists, and housing industry groups launching an all-out "legal war" in opposition. Many lawyers have argued the CDC had no right to enact it. The CDC and the Justice Department in a pronouncement last fall clarified that landlords are allowed to start eviction processes while the federal moratorium is active.

Further protections announced for homeowners 

On the heels of the Supreme Court's Tuesday ruling, the FHFA Wednesday issued changes to loan modification terms for COVID-19 impacted borrowers with mortgages backed by Fannie Mae or Freddie Mac. The updated terms, which allow payment reduction for home retention, "are specifically for borrowers with permanent COVID-19 hardships and respond to the unprecedented nature of the pandemic," according to a news release from FHFA.

Flex Modification terms will be adjusted for COVID-19 hardships making interest rate reduction possible for eligible borrowers, according to FHFA, regardless of the borrower's loan-to-value ratio.

"Allowing more families to qualify for an interest rate reduction will prevent unnecessary foreclosures, help strengthen the [GSE's] books of business, and make sustainable homeownership a reality for more families currently living with the uncertainty of forbearance," said Acting FHFA Director Sandra L. Thompson.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at [email protected]

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