Trump Signs Executive Order on Foreclosures, Evictions

The president’s executive order doesn’t actually prohibit foreclosures or freeze evictions. So, what does it do?

On August 8, 2020, President Donald Trump issued an executive order on "Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners." This order contains several recommendations and general instructions for what the government can do to help people who are in danger of losing their housing during the coronavirus crisis. But the order doesn't actually set up any relief programs, impose a foreclosure moratorium, or prohibit evictions.

What the Order Says About Mortgage and Rent Payments

The president's directive stops short of developing a new program to financially help those who're having trouble making their mortgage or rent payments. Instead, the executive order merely states, "The Secretary of the Treasury and the Secretary of Housing and Urban Development shall identify any and all available Federal funds to provide temporary financial assistance to renters and homeowners who, as a result of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations."

So, the order is just a call for federal agency leaders to look for funds to help people avoid foreclosure or eviction.

What the Order Says About Foreclosures and Evictions

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act imposed a 60-day foreclosure moratorium starting March 18, 2020, for federally backed mortgage loans. The CARES Act also included a 120-day prohibition on evictions for renters who participate in federal housing assistance programs or live in a property with a federally backed mortgage loan. These moratoriums have now expired.

Even though the foreclosure and eviction bans under the CARES Act are over, the president's new order doesn't prohibit foreclosures or evictions outright. The order merely says, "The Secretary of Housing and Urban Development [HUD] shall take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19." Basically, the order suggests that HUD take actions such as encouraging and providing assistance to public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.

The presidential order also states, "The Secretary of Health and Human Services and the Director of CDC shall consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary to prevent the further spread of COVID-19 from one State or possession into any other State or possession." So, while the order gives the housing authority broad power to stop evictions by citing the risk of COVID-19 spread in a community, it doesn't put an immediate freeze on evictions or provide financial help to renters.

The Bottom Line

Ultimately, the president's executive order doesn't do much to assist homeowners or renters who can't afford their mortgage or rental payments right now; it only instructs the administration to find a way to help people and identify federal funds for this purpose. Some states, however, have set up programs to provide financial assistance to homeowners and renters.

While a different presidential memorandum (one that directs the Department of Education to suspend federal student loan payments) will likely be useful to those facing a financial hardship due to the coronavirus pandemic, the order on foreclosures and evictions won't immediately help anyone.

Effective date: August 8, 2020