Friday, April 23, 2021
Home #COVID The Biden Administration Hammers Final Nail In Ma And Pa Landlord's Coffin

The Biden Administration Hammers Final Nail In Ma And Pa Landlord’s Coffin

CFPB Taking The Reins From CDC In Legalizing The Perma-Moratoriums

Against the advice of Centers for Disease Control (CDC) officials, President Biden ordered the extension of CDC based COVID moratorium which several federal courts have stated exceeds the agency’s statutory authority provided in Section 361 of the Public Health Service Act, 42 U.S.C. § 264(a) (PHSA). Additionally in play are 4th and 14th Amendment claims. Holland and Knight, a multi-national law firm, has a great piece out that really brings into view the problematic nature of of the CDCs actions entitled Two Federal Judges Declare CDC COVID-19 Eviction Moratorium Unenforceable. Authored by H&K attorneys Brett Carroll and Jessica Early, it delves into the rulings against the Biden’s Administration and the CDCs continued moratoria depriving landlords of their inability to commence eviction proceedings. Of note, is the following from their article,

In Terkel v. Centers for Disease Control and Prevention, No. 6:20-cv-00564 (E.D. Tex. Feb. 25, 2021) and Skyworks, Ltd. v. Centers for Disease Control and Prevention, No. 5:20-cv-2407 (N.D. Ohio Mar. 10, 2021), groups of landlords, property owners and property managers, and a trade association challenged an order issued by the U.S. Centers for Disease Control and Prevention (CDC) – a major operating component of the U.S. Department of Health and Human Services (HHS) – that prohibited them from evicting certain tenants for nonpayment of rent. These recent decisions come on the heels of earlier orders out of Georgia, Louisiana and Tennessee refusing to enjoin the CDC’s order.

CNBC has a piece out on how the Biden Administration’s latest implementation of the CDC moratorium is a nail in the coffin for ma and pa landlords. Most statistics peg their ownership at over half of all rental inventory. And as the CNBC article discusses, at least eleven percent of those landlords are being forced to sell their assets. I want to put into perspective the number of renters — and thus assets — which are now potentially being handed over to the Too Big To Fail entities. on 07 April 2020, Maggie McCarty Specialist in Housing Policy and David H. Carpenter Legislative Attorney, wrote a report for the Congressional Research Service (CRS) — the entity that prepares reports for Congress — that there are roughly 43 million renters in the US. If we take, on average, that there are two people per household — that would account for children in some and couples in others as a whole — we come up with 21.5 million rental units plus or minus. If we then take 21.5 million units and divide by 2 as ma and pa landlords compose at least 50 percent of ownership, we get roughly 10.75 million rental units. And if we then take 10.75 million rental units and multiply by 11 percent, we come up with nearly 1.2 million units already sold.

No one is arguing whether or not municipal, county or state officials have the legal right to enact moratoria. Each and every jurisdiction would appear to have that legal right and the federal government appears only to have buttressed the moratoria existing at those levels. Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The CARES Act eviction moratorium expired on July 24, 2020. The protections in the CARES Act, under §4024, supplemented temporary eviction moratoria and rent freezes implemented by governors and other local officials using emergency powers. Covered tenants could not be forced to vacate, and landlords could not file notices to vacate, until 30 days after the expiration of the moratorium 23 August 2020. The CDC eviction moratorium took effect 04 September 2020, and was initially slated to extend through 31 December 2020. However, it was extended legislatively through 31 January 2021, and extended again by CDC through 31 March 2021. On 29 March 2021, CDC further extended the moratorium until 30 June 2021.

Congress has the ability to enact legislation and the states have the ability to constitutionally challenge such. Arguably, I do not think anyone would want to challenge the CARES Act. So, I want to pick up our story on 24 August 2020. At that point-in-time, the legal rights of landlords and mortgagors were restored when it came to the 4th and 14th Amendment. Landlords were, if unrestrained by municipal, county and state officials, allowed to file evictions and foreclosures — at least in principal. On 04 September 2020, though, those rights were, yet again, seized and such seizure occurred without Due Process or Equal Protection Under Law. It was arguably the first time since the Revolutionary War that the government could seize assets without Due Process, Equal Protection, or compensation — many may remember the quartering of soldiers in colonial homes.

There are arguments, on both sides of the aisle, to be made. On the one hand, allowing a pandemic to spread, unrestricted, makes little sense. To this point, early on, COVID was unknown and not scientifically understood. By the middle of August, though, it appears that the scientific community knew what they were dealing with. The true concerns were never so much about protecting people, but were, rather, more about protecting the fragile health care infrastructure. The 1.9 hospital beds per 1,000 people was woefully inadequate and when compared to places like Argentina, for example whom had 5 hospital beds per 1,000 or the Ukraine whom had 7.5 per 1,000,  the reality began to boil down to saving face by not admitting the US was in worse shape than most third world countries. On the other side of the coin lay those whom felt that cratering the economy on the shoulders of Main Street was a price too high to pay and I agree with them.

In fact, it is obvious that the Biden Administration has finally realized that it is in a proverbial world of shit. This morning, the CFPB released their proposed rule change to Regulation X. Many of you will remember Regulation X from the 2008 Crisis wherein the Emergency Economic Stabilization Act — Dodd Frank legislation — was passed. In this nod from the CFPB the Beltway is admitting, outright, that the one off CDC Moratorium extensions have run their course and the federal judiciary is growing tired of extending carte blanche to the pundits whom would ever increase the ability of Washington to meddle in state affairs. Granted, small servicers are not required to abide by Regulation X; however, they are, as the name implies, small. Even more concerning, though, is the simple and salient fact that the Mortgage Field Services Industry will not be able to stay afloat for another eight months. Grass cut pricing is now at $30 per acre, three dollar inspections the norm, and if you are stupid enough to go for that pricing, you are up to 60 days out attempting to get paid.

If you are looking to make a change, why not make it today and join the thousands of folks in the Foreclosurepedia Nation whom have. Services like Maintenance and Remodeling are available from firms whom are willing to pay top dollar for your services. And with storm season rapidly approaching, why put off until tomorrow what you could do TODAY!

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Paul Williams
Linux addict buried deep in the mountains of East Tennessee.



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