The Eviction and Foreclosure Moratoria

What the new update means and how it impacts residents.

At its most basic definition, foreclosure is a legal process that allows lenders to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. When a borrower signs a mortgage loan agreement, they’re giving the lender the right to foreclose the home should they fail to uphold the terms of the mortgage document, such as missing multiple mortgage payments. Although staying on top of mortgage payments is important, unexpected loss of income can make it difficult to avoid foreclosure.

Due to complications of COVID-19, many Americans have experienced this unexpected loss of income, and have also had continued difficulty finding another job. In response to this, the government issued an order to halt all evictions. The halt initially started in September 2020 and was extended to end in July of this year, but President Biden recently proposed an extension specifically for the areas in which transmission was rapidly increasing. However, the Supreme Court denied the moratorium extension on August 26 and announced that evictions would resume, even in the areas with soaring rates of virus transmission. So, what does that mean for homeowners?

What’s the difference?

The first thing that homeowners need to understand is the difference between the current CDC guidance on evictions and the Supreme Court decision. The initial eviction moratorium issued by the CDC was backed by a presidential order that made it legally binding. The same order was extended to July 2021 through congressional voting. However, the CDC’s most recent moratorium acts simply as a suggestion, because, while the CDC does have some legal authority, they do not have the power to extend the eviction moratorium without congressional, presidential, or Supreme Court approval. 

What does this mean for foreclosure?

The second thing that homeowners need to understand is what the recent Supreme Court decision means for foreclosure. In the initial eviction moratorium, qualifying homeowners were protected from foreclosure to a certain extent. Although this protection has now ended, several federal agencies such as the HUD, USDA and VA announced additional measures to help qualifying individuals pay their mortgage, thus avoiding foreclosure. The end dates of these protections vary by agency. However, the federal government has also allocated nearly $10 billion to the Homeowner Assistance Fund, which provides states with funding to help homeowners catch up on overdue payments to avoid foreclosure. Most states, including Tennessee, will start accepting applications for these funds in the fall of 2021. 

What now?

United Housing understands that waiting for state and federal aid may not be an option for people who are close to foreclosure. If foreclosure is inevitable, it’s important to seek help as soon as possible to minimize any consequences. You can contact your lender or local organizations like United Housing to find out about mortgage assistance options. In fact, most mortgage lenders want to help you avoid complete foreclosure, and are often willing to give you options even after multiple missed payments. United Housing also offers COVID-19 mortgage assistance for qualifying individuals. This program is a great way to prevent foreclosure while awaiting state or federal funds. 

If you or a loved one is experiencing foreclosure, United Housing is here to help. UHI offers several options to either prevent foreclosure from happening, or getting you through it when it does. From our homebuyer education courses that address important topics like credit and foreclosure, to our post purchase educational class that teaches mortgage budgeting, we also offer access to HUD-certified counselors that can address your specific situations. To learn more about United Housing’s resources, call us today at (901) 272-1122.

Making a Plan for Your Home

Estate planning is not a topic that anybody wants to address, but it’s one that should be addressed. Just as it’s important to create a plan for your possessions should you pass, it’s important to create a plan for your home. Planning for your home in the case of incapacitation or death is the only way to ensure that your property passes to your intended recipient smoothly.

Homes are important financial assets; the value of real estate typically appreciates over time. Passing your home down to loved ones builds generational wealth and helps facilitate long-term housing for future generations. Without proper planning, your home could go into probate after you pass, which is a potentially costly and lengthy procedure for beneficiaries to gain legal ownership of the property.

There are several ways to make a long-term plan for your home in the state of Tennessee. Below, we outline a few of these methods. 

Willing your home.

Wills are a document to help make sure that your property goes to the intended recipient after your death. A will is not legally required for property to pass to your loved ones. But without a will, state laws determine the distribution of an estate's assets, which may not match your intentions for the property. 

Although wills must be confirmed in a probate court before going into effect, having one helps speed up the process and helps prevent the property from becoming fully probate. To will your property in Tennessee, you must create a hard copy of a will, designate the proper witnesses, executors, and beneficiaries, then sign it. Ensuring you designate one beneficiary is important, as your property could pass equally to multiple children without a clear beneficiary, leaving them with tough decisions to make after you pass. Although certain circumstances make wills more complicated, they are generally an accessible way to help make sure your property is passed down to your intended recipients.

Living trusts.

Living trusts are similar to wills in that you create a document to pass the property to an intended person. In the case of living trusts, the document is called a trust document and it significantly decreases the possibility of a property becoming probate. To make a valid trust document you must create it in accordance with state laws, name your intended successor within the document, then properly transfer ownership of your assets (the property) to the trust. 

While Tennessee does not require an attorney to make a living trust, it is beneficial to get professional input because living trusts can be complicated. Additionally, unlike wills, living trusts must be notarized. 

Joint ownership. 

Joint ownership allows a property to pass directly to the surviving owner when the other owner passes. Joint ownership requires proof of paperwork, but the property does not need to pass through probate with this method. 

There are two types of joint ownership in Tennessee: Joint tenancy and tenancy by the entirety. Joint tenancy can be held by non-married or married couples and requires that the pair each have equal ownership of the property in life. Tenancy by the entirety is for married couples only and recognizes the couple as a singular unit. 

Although joint tenancy is an effective way to avoid probate, it does require that you gift half of your legal rights on the property to another person if you are the sole owner. Therefore, it is important that the joint ownership is in a trusted individual’s name. 

Navigating heirship and planning for your estate can feel overwhelming but preparing in advance can help make sure that your loved ones and your home are taken care of. For more information on property ownership in general, check out our blogs or attend one of our homebuyer education courses. 

Affordable Housing: A Way for Women to Gain Financial Freedom

Politics, religion and money – three things we are told to avoid in conversation with others. While the rules surrounding the first two have begun to relax, discussing money is still considered taboo. And, this sense of taboo only increases when discussing women’s financial health.

 Especially for women, understanding your finances – where your money goes and how to get the most out of it – is essential. Women are more likely to experience gender-based pay discrimination, lower wages and societal pressures that affects their earnings. Women are also more likely to have lower levels of financial knowledge, which can negatively affect their ability to achieve financial freedom and success. United Housing is committed to identifying these unique challenges and helping women overcome them, starting with affordable housing. 

Housing is a basic human need, and therefore a vital part of any budget. As an essential expense, housing has the power to significantly impact one’s financial freedom and quality of life. Unfortunately in most cities, housing options within people’s budgets are often unavailable. In fact, 7.2 million more affordable housing units are needed in the U.S. to meet the needs of low-income families. This lack of affordable housing causes people to stay in living arrangements that don’t work for their family, or to overextend themselves and their budgets to pay for a place to live that does meet their needs. Studies show that there is no state or county where a renter working full-time at minimum wage can afford a two-bedroom apartment. 

 In addition to an overall lack of affordable housing units in the U.S., women often face unique circumstances that make the search even more difficult. In comparison to men, women are more likely to live as single parents, making it challenging to find housing that is large enough to accommodate children while still staying within budget. This also renders many single moms unable to live safely and comfortably in traditionally affordable spaces, like studio apartments. Along with being more likely to have children, women are also more likely to be victims of assault. That means they must take area safety into consideration when looking for housing. Meaning, housing within their budget may be available, but they are less likely to purchase or rent if it offers inadequate protection or is located in an unsafe area.

 United Housing is here to help women, and all Memphians, overcome housing inequality and reach financial independence. Through our Homebuyer Education Courses and housing counseling, we work to provide our clients with the necessary tools and knowledge to gain or maintain financial wellness. If you want to work toward financial wellness or learn more about our work toward affordable housing for all Memphians, give us a call at 901-272-1122 today.