The clock has run out for real estate groups that hoped to topple the Centers for Disease Control’s (CDC) federal eviction limits. In a split decision, the Supreme Court denied a request from a group of Alabama real estate agents to block the eviction ban.
Justice Brett Kavanaugh, who wrote the one-page, unsigned order, said that although he agreed that the CDC exceeded its authority in granting the nationwide moratorium, it is too late now to do anything about it.
Allowing the eviction moratorium to run its course will allow for the “additional and more orderly distribution” of rental assistance, Kavanaugh wrote. The U.S. Treasury Department has set aside up to $46.55 billion to pay rent owed, which states can distribute to eligible households through their rental assistance programs.
In May, a federal judge briefly vacated the CDC’s eviction ban. Within hours, the Department of Justice appealed the decision, and the federal judge granted an emergency stay of the decision.
The CDC’s moratoriums “shifted the pandemic’s financial burdens from the nation’s 30 to 40 million renters to its 10 to 11 million landlords — most of whom, like applicants, are individuals and small businesses — resulting in over $13 billion in unpaid rent per month,” the plaintiffs’ lawyer told the justices. They wrote that the moratoriums could remove $200 billion from landlords’ pockets, which they called a “massive transfer of wealth” that would “never fully be undone.”
As borrowers impacted by COVID-19 continue to exit mortgage forbearance, now is the time for lenders and servicers to be proactive in their borrower outreach to reduce foreclosure volume.
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The CDC’s eviction ban does not prevent the initiation of foreclosure proceedings, but allows eligible renters to use a hardship declaration as defense in court.
The limits are scheduled to expire at the end of July. The Biden administration renewed both the ban on evictions and foreclosures for a final month. Some states and cities have passed more stringent limits on evictions, while evictions have continued apace in other areas.
However, should the federal government decide to extend the eviction moratorium again, the conservative justice said that Congress would need to give its blessing.
“In my view, clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31,” Kavanaugh wrote.