SAN DIEGO – A moratorium on foreclosures has been in place since the beginning of the coronavirus pandemic but now that it is over, landlords are starting to lose their investment properties to foreclosures.
“The foreclosure moratorium has stopped,” said Real Estate Attorney Kent Sharp. “We are now seeing a lot coming forward with a lot of lenders saying, ‘You owe me money,’ and the reason they owe money is because a lot of landlords can’t pay the full amount that is owed.”
Sharp, who represents renters and landlords, says it’s nearly impossible to evict renters, leaving landlords unable to pay back loans and eventually facing foreclosures.
“If they’re not getting the resources and the money coming in from their tenants, which they’re not, then it’s all on them,” said Sharp.
When banks take the property from landlords, the renters stay put as well, making the banks struggle with a non-performing asset.
Sharp says real estate experts are watching California’s fresh pandemic funds, which are expected to support the financial gap between renters and landlords.
“In California, there’s $2 billion on the side that’s going to be administered,” said Sharp. “The question is, how is that going to be administered? Is it going to be administered to the landlord side? Is it going to be administered for the protection of the tenants? And that’s the big fight right now.”
Additionally, even if a case is cleared to see a judge, finding time on a court docket can be a challenge.
“These courts are so impacted that justice isn’t being done,” said Sharp.