Massachusetts Foreclosure Moratorium: What You Need to Know

The state of Massachusetts passed Chapter 65 of the Acts of 2020, establishing a temporary moratorium to prohibit non-essential evictions and foreclosures. This act was titled “An Act for a Moratorium on Evictions and Foreclosures During the COVID-19 Emergency,” and expired on October 17, 2020. With the expiration of this state moratorium, the Centers for Disease Control and Prevention (CDC) order is now in effect for the state of Massachusetts. This order remains until December 31, 2020.

Details of the CDC Order

This order does not apply to a state with eviction moratoriums already in place with the same or greater resolve for public health protection. Therefore, this order by the CDC did not take effect in Massachusetts until after October 17, 2020.

The Department of Health and Human Services along with the CDC declared a final register notice for this moratorium in order to prevent the further spread of COVID-19. A “covered person” may not be evicted by a landlord of residential property due to a lack of payment for rent or other form of housing payment. The “covered person” is a residential inhabitant who has provided the landlord, owner of the residence, or other individual legally permitted to pursue eviction and other actions to take possession of the residence, with the following truthful declaration:

  1. The individual has pursued all avenues of obtaining government assistance for rent or housing payments;
  2. The individual applies to one of the following categories:
    1. Will earn up to or less than $99,000 in yearly income for the 2020 calendar year (if filing a joint tax return, $198,000 or less)
    1. Had no obligation to report an income to the U.S. Internal Revenue Service in 2019
    2. Received a stimulus check (also known as an Economic Impact Payment) according to section 2201 of the CARES Act;
  3. The individual is incapable of making payments in full for rent or other housing payments due to a significant decrease in household income, work dismissal, reduction in compensable working hours, or substantial out-of-pocket medical bills;
  4. The individual is putting forth every effort to make partial payments on time, paying as close to the full amount as possible in the current financial circumstance, accounting for other obligatory expenses; and
  5.  An eviction would leave the individual homeless, or lead to the individual relocating to a shared residence with close living quarters, due to a lack of other residential options.

The CDC has provided a standard form declaration for tenants to use in order to deliver the previous statements to the landlord. The form declaration is not required, as long as a comparable declaration is given under penalty of perjury.

All residential landlords and property owners are obliged to abide by this order. Any individual found to violate this order could face significant criminal penalties. If the violation does not lead to death, the person could receive a fine up to $100,000, a year in jail, or both. If the violation does lead to death, the person could receive a fine up to $250,000, a year in jail, or both. If an organization is the violator, this group is subject to more substantial fines including $200,000 if the violation does not lead to death and up to $500,000 if the end result is death.

Programs to Help with Rent and Mortgage Payments

The Massachusetts Department of Housing and Community Development (DHCD) has established two programs to help low-income households pay their rent or mortgage during this time. These two programs are described below:

Residential Assistance for Families in Transition (RAFT) Program- This assistance is available for those who have a household income of up to 50% of the Area Median Income (AMI), or up to 60% for those who are faced with domestic violence that could lead to homelessness.

Emergency Rental and Mortgage Assistance Program (ERMA)– This program is established for those who are not eligible for RAFT but are still in significant need of help due to the current economic crisis. Households in the 50-80% range of the AMI could benefit from the ERMA program.

A Moratorium is Not a Long-Term Solution

If you are currently facing financial difficulty due to the effects of the pandemic, it is important to remember that a moratorium is not a long-term solution. A moratorium will buy you time to get your finances in order, make up for missed payments, or even sell your home. If you are looking for a solution to get you back on your feet fast, consider selling your home for cash to a professional home buyer.

At Pavel Buys Houses, we will provide you with the knowledge you need to help you understand the process and find a solution that works best for you. The moratorium won’t last forever, and you will need to be prepared when it ends. Interested in selling your home for cash? Chat with us today.

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