Mortgages Deferred and Rent Frozen: DC Council Passes Supplemental COVID Response Bill

• April 7th 2020

by Nena Perry-Brown

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Today, the DC Council unanimously voted to pass supplemental COVID response legislation that clarifies and expands the protections from an emergency bill passed three weeks ago.

For the duration of the public health emergency, the COVID-19 Response Supplemental Emergency Amendment Act creates room for relief for both tenants and landlords.

The bill requires that mortgage servicers on residential and commercial loans allow affected mortgagees to defer mortgage payments for at least 90 days, waiving any late or ancillary fees and not reporting derogatory marks to credit bureaus.

The deferment option will remain in place for 60 days following the end of the emergency period. The mortgage servicer and mortgagee can arrange for deferred payments to be made in "a reasonable time", or within five years from the end of the deferment period or the end of the loan.

Any landlord mortgagee granted deferments must in turn reduce the rent of affected commercial and residential tenants during the deferment, at a rate proportionate to the reduced mortgage payments. 

Residential units would be on a rent freeze during the public health emergency, and renters who had previously submitted a notice to vacate their unit before or during the emergency will also be able to suspend the date to vacate during the emergency.

Along with an amendment act, the bill clarifies the rules around unemployment insurance and paid leave, bans debt collectors from initiating communication with debtors (except for mortgage loans), and bans cellphone, internet and cable providers from cutting off basic service. The bill also enables the city to borrow up to $300 million to meet financial obligations through the end of the fiscal year (September 30th).

Unlike a previous draft, the bill omits a "wage replacement program" for some workers who aren't eligible for unemployment insurance, an omission with which several councilmembers expressed disappointment.

The bill also authorizes the public health emergency to be extended 90 days. All COVID bills and amendments are also being combined into one to speed Congressional review.

UPDATE: Following passage of today's legislation, the Office of the Attorney General issued a statement ensuring enforcement of the consumer protections, including where debt collections and utility service are concerned. “We will immediately begin enforcing these new protections to keep residents safe,” AG Karl Racine said in a statement. 

UrbanTurf's Coverage of COVID-19 

• The Drive-Thru COVID Testing Rundown for the DC Area
• Eviction Moratorium Covers One in Four Rental Units Nationwide
• Where Are DC-Area Residents Going (And Not Going)
• Three People Max, Six Feet Apart: Maryland Issues COVID-19 Guidelines to Realtors
• Proposed Bill Would Provide Mortgage and Rent Relief to DC Residents
• DCBIA to Lobby For Local Mortgage Relief To Help Renters
• From Virtual Open Houses to Focus Forums, How DC Brokerages are Maintaining Physical Distance
• Pandemic Puts DC Historic Review Applications On Hold
• One Title Company Implements Drive-Thru Closings
• How Coronavirus is Affecting Property Showings in the DC Area
• How Well is DC Doing at Social Distancing?
• Lyft To Donate Free Essential Rides
• Bank of America Allowing Borrowers to Defer Mortgage Payments
• A Look at 5 Housing Non-Profits in DC
• Van Ness Co-op Building Implements Strict COVID-19 Measures 
• HUD, FHFA Suspend All Evictions, Foreclosures Through April
• Two Grocers and Mega Retailer Change Hours for Seniors
• DC Council Passes Sweeping COVID-19 Emergency Bill

This article originally published at https://dc.urbanturf.com/articles/blog/mortgages-deferred-and-rent-frozen-dc-council-passes-supplemental-covid-res/16686.