Bans Repossessions and Foreclosures for Six Months and Expands CARES ACT protections to all “Covered Mortgage Loans”
Washington DC – 20 July 2020 – 2020 just keeps getting better. With congress just getting back to town and talk of another round of stimulus funding in the air, it should come as no surprise that Congresswoman Maxine Waters has introduced and passed on a vote of 232-180 a new bill banning repossessions and foreclosures.
HR 7301 “Emergency Housing Protections and Relief Act of 2020”, replicates many of the moratoriums and forced forbearances of its failed effort from March’s “Heroes Act”, HR 6321.
Similar to March’s HR 6321, HR 7301 expands some of the protections of the CARES Act, which only covered federally guaranteed mortgages to include;
(page 32 line 7) “(A) by striking ‘‘Federally backed mortgage loan’’ each place such term appears and inserting ‘‘covered mortgage loan’’; and (B) in subsection (a)— (i) by amending paragraph (2) to read as follows:
‘‘(2) COVERED MORTGAGE LOAN.—The term ‘covered mortgage loan’ means any credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a 1- to 4-unit dwelling or on residential real property that includes a 1- to 4-unit dwelling, except that it shall not include a credit transaction under an open end credit plan other than a reverse mortgage.’’; and
But wait, there’s more! Just like it’s predecessor, HR 6321, HR 7301 places a six-month moratorium on repossession activity that would totally kill the already crippled industry.
Page 39, line 3 – ‘‘(3) REPOSSESSION MORATORIUM.—In the case of personal property, including any recreational or motor vehicle, used as a dwelling, no person may use any judicial or non-judicial procedure to repossess or otherwise take possession of such property for six months after date of enactment of this paragraph.’’
Unlike prior bills, this act is a little shorter is scope and seeks this act to be in place for 12 months from date of enactment rather than six-months after the end of the pandemic period. Regardless, the damage this would do to the credit union, bank and repossession industries would be catastrophic.
“COVERED PERIOD.—With respect to a loan, the term ‘covered period’ means the period beginning on the date of enactment of this Act and ending 12 months after such date of enactment.’’
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