Federal Policy Updates - Eviction Moratorium and Small Business Bankruptcy Expansion
Over the last few months, numerous policies have been enacted or extended to provide targeted COVID relief for businesses and individuals. We wanted to highlight the mortgage/foreclosure moratorium and the extensions of the small business bankruptcy debt limit expansion.
Eviction Moratorium For Some Borrowers
On February 25, 2021, the Federal Housing Finance Agency announced an extension of COVID-19 mortgage relief policies including:
· Fannie Mae (“Fannie”) and Freddie Mac (“Freddie”) are extending the moratorium on foreclosures for single-family mortgages until June 30, 2021. This moratorium only applies to mortgages backed by Fannie or Freddie.
· Borrowers with mortgages backed by Fannie or Freddie might be eligible for an additional three-month forbearance. This extension would allow for a total of 18 months of COVID forbearance.
Extension of Small Business Bankruptcy Expansion
On March 27, 2021, President Biden signed into law the COVID-19 Bankruptcy Relief Extension Act of 2021, which extended major provisions of the Bankruptcy Relief Act. The provisions that have been extended include:
· The business debt limit under subchapter V of the Small Business Reorganization Act remains elevated from $2,725,625 to $7,500,000 until March 27, 2022.
· The definition of “Income” for bankruptcy purposes excluded coronavirus-related payments from the federal government.