Summary

The following memorandum provides an overview of the responses of courts and local and state governments of certain jurisdictions, as well as of the federal government, to the COVID-19 outbreak. The analysis has a particular focus on mortgage foreclosures and evictions, particularly in the commercial context, although information and guidance remains limited. Effects on residential foreclosures and evictions have been included as governments have tended to provide protection to residential properties first. Eventually, more state and local governments may provide guidance as to commercial foreclosures and evictions

In the interim, we would also like to provide certain high-level thoughts on these matters:

• Most of the higher populated states and/or major cities (e.g. New York, Los Angeles, Chicago, Atlanta) have instituted statewide or citywide moratoriums or limitations with respect to in-person or, in some instances, any state court hearings.
• While this may not directly impact deed of trust/non-judicial foreclosure states, certain trustees and sheriffs required to conduct foreclosures sales have informed us that they need consents from borrowers/property owners to move forward with these processes in light of COVID-19.
  • In addition, a foreclosure in a deed of trust state is arguably not complete unless and until the deed under power of sale is recorded in the public records. Several clerk’s offices have informed us that they are accepting e-recording or recordation by mail or overnight courier.
  • It is likely that recording will be delayed significantly. Title companies are exercising caution and, except in certain jurisdictions that permit electronic recording, are generally not providing gap coverage.
• As for court-based foreclosure processes, we expect not only a delay on existing matters, but also issues on filing and obtaining an assignment of a judge in new matters. In certain jurisdictions, while electronic filing will result in a new case receiving a case number, there have been delays in having a judge assigned.
• With respect to requests for receivers, obtaining relief (either through a court hearing or on an ex parte basis)¹ will be (and will continue to be) difficult without an emergency basis for expedited relief. Other than health issues or significant property damage, a court’s willingness to entertain receiver motion practice will be limited until the courts return to normal operation.
• These delays and limitations will likely apply equally to matters initiated in state or federal court – although we have seen federal judges being more responsive on certain matters pertaining to emergency requests for relief. As such, there may be circumstances where pursuing a new matter in federal court can be more effective from a timing perspective.
• Finally, title exams require examiners to be present at the clerk’s office to search the physical records. Court closures may preclude or limit this ability. As a result, government closures may cause lenders to delay foreclosure proceedings because they cannot obtain minutes of foreclosure or similar title products.
• A mezzanine or other lender that obtained a pledge of ownership interests as security for its loan can still conduct a foreclosure sale under the Uniform Commercial Code (UCC) without the oversight of any court or other judicial body. However, the UCC requires that all aspects of these sales be conducted in a “commercially reasonable” manner, which may prove challenging or require a different approach than has been commonly utilized in the past. 

We have highlighted certain major jurisdictions below, as well as jurisdictions for which information was readily available – analysis on other jurisdictions is available upon request. Note that the discussion below is based on current orders entered by federal and state courts and federal, state, and local governments as of March 20, 2020. These issues and orders are very fluid, with certain courts – like California, New York, and Illinois – likely to change as a result of shelters‑in‑place.

Recent Federal Government Action:

• On March 18, the Department of Housing and Urban Development, the Federal Housing Administration, and the Federal Housing Finance Agency announced an immediate moratorium on foreclosure and eviction actions for single family homeowners with FHA-insured mortgages for the next 60 days.
• The US Department of Agriculture, through its Rural Development program, is attempting to assist single-family homeowners in keeping their residences and is giving authority to applicable lenders to assist and cooperate with borrowers.

Recent Court and State and Local Government Action:

California

• In light of the shelter-in-place order entered in California, it is doubtful any court hearings will move forward over the next two plus weeks.¹
• Federal Courts:
  • Courthouses are closed to the public and all trials have been postponed until May 1 (E.D. Ca.).
  • Hearings will either be decided on paper or telephonically (E.D. Ca.), with all trials postponed until: May 1 (N.D. and E.D. Ca.), April 16 (S.D. Ca.), and April generally (C.D. Ca.).
• State and Local Government and Courts:
  • California courts have the broad power to alter their operations during emergencies. As of March 17, courts in at least a dozen counties have invoked this law, including the Sacramento, Contra Costa, and Ventura Superior Courts. Other counties are postponing all scheduled trials and hearings for up to 8 weeks or longer.
  • On March 16, the governor issued an order, in effect until the end of May, giving local governments the authority to suspend or halt residential or commercial evictions. The order also requests financial institutions holding commercial or residential mortgages to implement a moratorium on all foreclosure and eviction proceedings and actions whose causes relate to COVID-19.
  • The mayors of San Francisco, San Jose, and Los Angeles have issued moratoriums on residential evictions whose causes relate to COVID-19, with the Los Angeles moratorium also extending to commercial tenancies, until at least March 31. The Alameda and San Francisco County sheriff’s offices have announced they will suspend or postpone residential evictions.

Colorado

• Federal Courts:
  • All trials scheduled to begin before April 1 are postponed indefinitely.
• State Courts:
  • Most jury trials have been postponed until at least April and the Chief Justice of the Colorado Supreme Court has encouraged lower courts to postpone or hold telephonically all non-essential hearings.

Florida

• Federal Courts:
  • The courts in the Northern District are closed to the public while those in the Middle District are barring certain individuals from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining).
  • All trials scheduled to begin in the Southern District on or before March 30 are postponed indefinitely.
• State and Local Government and Courts:
  • On March 17, the Florida Supreme Court ordered that in-person hearings be restricted to matters “essential” or “critical” to the COVID-19 emergency. Each chief judge will direct its respective court to conduct telephonically, reschedule, postpone, or cancel all non-essential and non-critical proceedings and events.
  • At least three counties have suspended residential evictions – Miami-Dade, Orange, and Hillsborough (at least April 20) – and sheriffs in those counties will not assist in such evictions. The governor is considering issuing a statewide moratorium on residential evictions (as of March 19).

Georgia

• Federal Courts:
  • In all districts, certain individual are barred from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining).
  • No jury trials will be held in the Middle District until at least after May 16.
• State and Local Government and Courts:
  • Several courts have closed to the public while others are limiting access.
  • Non-judicial foreclosures are conducted on the courthouse steps and several courts have confirmed that, for now, foreclosures scheduled for April are expected to continue in the same manner, even where courts are closed to the public. Such sales occur after statutorily required advertisement, and we have not encountered any issues regarding publication of such advertisements.
  • The mayor of Atlanta instituted a moratorium on dispossessory proceedings.

Illinois

• In light of the shelter-in-place order entered in Illinois (through April 3, 2020), it is doubtful any court hearings will move forward over the next two plus weeks.
• Federal Courts:
  • In the Northern District, all civil case deadlines are extended by 21 days and all hearings, trials, and settlement conferences scheduled through April 3 will be rescheduled, all in-person civil matters in the Southern District are postponed until further notice, and all civil hearings, including settlement conferences, in the Central District should be conducted by telephone or video conference.
• State Courts:
  • On March 13, the Illinois Judicial branch recommended that all courts limit or avoid non-essential in-person proceedings. In Cook County (i.e. Chicago), all civil matters or proceedings with dates scheduled to occur within the next 30 days (starting March 17) will be suspended indefinitely.

Indiana

• Federal Courts:
  • All courts are closed to the public. The Northern District courts will continue to conduct all “necessary” hearings. All jury trials in the Southern District scheduled through May 1 are postponed indefinitely.

• State and Local Government:
  • On March 19, the governor announced a moratorium on eviction and foreclosure proceedings on residential property during the pendency of the state’s state of emergency. The state of emergency is set to expire on April 5, but the governor has made clear he will extend it an additional 30 days.

Kansas

• Federal Courts:
  • Certain individual are barred from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining).
• State and Local Government:
  • On March 18, the governor banned all evictions and foreclosures until May 1. This order prohibits mortgage foreclosures by financial institutions operating in Kansas, as well as commercial and residential evictions.

Louisiana

• Federal Courts:
  • Certain individual are barred from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining) (M.D. and E.D. La.) while public access to the Western District is suspended.
  • All trials are postponed until after May 1 and, in the Eastern District, all in-person hearings scheduled through May 1 are postponed.
  • All proceedings requiring in-person attendance through April 10 are suspended indefinitely and no in-person filings will be accepted through April 13 (M.D. La.).
• State and Local Government:
  • On March 18, the governor suspended all foreclosures and evictions. It is unclear whether this applies only to residential properties or also to commercial properties.

New Jersey

• Federal Courts:
  • Certain individuals are barred from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining).
  • All trials scheduled through April 30 are postponed indefinitely and judges are encouraged to conduct all proceedings telephonically.

• State and Local Government:
  • On March 19, the governor banned all residential evictions and foreclosures. Landlords and creditors can still initiate such proceedings, but they cannot carry out removal until after the ban is lifted.

New Hampshire

• Federal Court:
  • All jury trials scheduled through May 1 are postponed. And the court is closed to the public indefinitely.
• State and Local Government:
  • On March 17, the governor prohibited evictions or foreclosures. This moratorium is limited to residential properties.

New York

• In light of the shelter-in-place order entered in New York State, it is doubtful any court hearings will move forward over the next two plus weeks.
• Federal Courts:
  • All trials scheduled between March 16 and April 27 have been delayed (S.D. and E.D.N.Y).
• State and Local Government and Courts:
  • The governor issued a 90-day moratorium on foreclosure and eviction actions against residential and commercial mortgages and tolled all limitations period and the New York Department of Financial Services issued industry guidance urging, but not mandating, lenders it regulates to support adversely affected mortgagors.
  • On March 22, the state Supreme Court announced that courts will not accept filings except in certain emergency situations (e.g. mental health issues or domestic violence). Generally, fully submitted motions will be decided without argument while partially submitted motions will be administratively adjourned. The appellate divisions have suspended all oral arguments and, other than for May and June terms in the First Department, have suspended all filing deadlines.
  • New York and Kings Counties have indicated that all foreclosure auctions are postponed and all foreclosure conferences (including settlement conferences) will be administratively adjourned.
  • State legislators proposed amendments to the Real Properties Actions and Proceedings Law to give the courts new powers to prevent evictions and foreclosures during a state disaster emergency.

North Carolina

• Federal Courts:
  • All cases scheduled through April 16 (M.D.N.C.) and May 1 (E.D.N.C.) are postponed indefinitely. Deadlines are otherwise not extended unless the presiding judge specifically orders otherwise and certain individuals are barred from entry (e.g. those exhibiting symptoms of COVID-19 or those self‑quarantining) (M.D and E.D.N.C.).
• State Courts:
  • On March 13, the Supreme Court postponed most cases for at least 30 days, except for certain emergency circumstances.
  • On March 16, the state Supreme Court issued an order suspending all eviction and foreclosure actions in North Carolina courts for the next 30 days. The order does not specify whether this suspension is limited to residential eviction or foreclosure actions.

Texas

• Federal Courts:
  • Certain individuals are barred from entering any District courts (e.g. those exhibiting symptoms of COVID-19 or those self-quarantining). Jury trials in all Districts scheduled to commence through May 1 have been postponed, to be re-scheduled by the presiding judge. Judges in all Districts may continue to hold in-person proceedings at their discretion, but telephonic or video proceedings are encouraged. The Eastern District Court will be closed until at least April 1.
  • In the Northern District (i.e., Dallas), (a) all proceedings scheduled to commence through May 1 will be postponed and any unscheduled proceedings shall be scheduled to occur on May 1; (b) bankruptcy courts will consider earlier hearings for emergency first day filings and lift-stay motions; and (c) all docket calls will be held telephonically.
  • In the Western District (i.e. San Antonio and Austin), proceedings will be held telephonically.
• State Courts:
  • On March 19, the state Supreme Court issued an order barring any trials, hearings, or other proceedings related to residential evictions and tolling all related deadlines until at least April 19. Writs of execution may be issued, but they cannot be executed until at least April 26. Such proceedings may proceed if the plaintiff files a sworn complaint showing, through personal knowledge, an imminent threat of physical harm to a person or criminal activity.

1. The method for obtaining relief will differ based on jurisdiction and circumstances.

2. Not all of the shelter-in-place orders entered in various states have definite deadlines. Where available, such deadlines are included within.