Joe Biden has extended the Eviction Moratorium by Executive Order. The Supreme Court ruled that this was only possible through an act of Congress. Joe Biden did it anyway. This is the 7th time the Eviction Moratorium has been extended, which is killing mom and pop landlords. What many do not understand is that 53% of rentals are 1 - 4 units owned by small investors many times as part of their retirement portfolio. While billions have been approved to assist tenants and landlords, the states have been slow to get the money out.
And, in many instances tenants have gotten the rent money from the government; but not paid the rent to the landlord because they knew they could not be evicted. The landlords who still must make mortgage payments along with paying other expenses have gotten the short end of the stick. This money in lost income should have gone directly to the landlords not the tenants; but that is not what is happening.
However, landlords have three options to deal with this as follows:
1. Apply for Federal Aid - Good luck with that in terms of timing. If it works anything like other government agencies, it could take months for the money to come through.
2. Refinance the Mortgage - Good luck with that unless the landlord has significant assets and is not relying on rents for income.
3. Ask the current Mortgage Lender for Forbearance - This may be the best option in terms of timing. Lenders will work with landlords to delay mortgage payments because they really don't want to foreclose because it takes months.
23% of Mom and Pop landlords have been forced to sell their rental properties to big investors with deep pockets who can see this crisis through. This is another example of government good intentions gone bad. Unfortunately, huge bureaucracies get in the way of success. This is just one more example of government failure. As Ronald Reagan often said, "Government is not the solution to our problems, government is the problem."
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