The handling of the pandemic monies and its aftermath

Looking back to 2020, earning income to pay your mortgages and other expenses from your rental properties during the pandemic was a challenge for pretty much everyone. There was a ban on tenant evictions and late fees and tenants weren’t required to pay any rent. There was also mortgage assistance for landlords who had lost their tenant income so as to be able to pay their mortgages via the federal Corona Virus Aid, Relief, and Economic Security Act (CARES) and its successor, the Consolidated Appropriations Act of 2021 (CAA). In addition, there were EIDL (economic injury disaster loans) for self-employed individuals, as well as PPP Loans (Paycheck Protection Plan) assistance monies for employees, were also available. Many of these loans became grants and didn’t have to be paid back. Unfortunately, there were those that were not able to take advantage of the programs, either because they either didn’t apply, didn’t fill out the applications properly, or the available money was exhausted. As reported by Bloomberg Financial, CNBC, and NBC News, there were 80 billion dollars stolen out of the 800 billion from the PPP program, and in addition, 90-400 billion were stolen from the unemployment relief program, (there is no accountability to know the exact amounts taken) at least half from international scammers. Lastly, another 80 billion are believed to have been pilfered from the EIDL program. There was nobody watching the money as if the “fox was guarding the hen house” and no checks and balances were initiated as our tax money went out the window!

Those landlords and tenants that received assistance monies enabled them to stay afloat. The law also

BY PHILIP A. RAICES

put a stay on foreclosures on all federally backed mortgage loans e.g. Fannie Mae, Freddie Mac, or the US Department of Housing and Urban Development (HUD) on multi-family properties starting from March 18, 2020, for a period of 60 days, and provided 180 days of forbearance for borrowers who were directly affected by the coronavirus outbreak. The federal mortgage and relief programs were initially supposed to end on December 31, 2020; but President Biden extended the foreclosure moratorium for federally guaranteed mortgages through June 30, 2021. Borrowers who entered forbearance on or before June 30, 2020, would receive up to 6 months of additional mortgage payment forbearance in 3-month increments. Probably due to the high costs of mortgages and related expenses, States like New York and California and some local governments had also issued orders related to mortgage forbearance and foreclosure prohibitions in relation to the Corona Virus; but the details and degree of relief available varied greatly depending on the state and municipality.

We hadn’t experienced an event such as this since the Spanish Flu Pandemic of 1918, so we really weren’t as prepared as we could have been. Our previous President was advised as early as December 2019, by Peter Navaro, his economic international advisor, that there was a virus in Wuhan, China causing severe sickness and deaths. This information was circulated via the National Security Council widely around the White House and federal agencies. By late January, alarm bells were ringing, but the situation was downplayed. By March, as the Pandemic came and grew like a Tsunami, people were getting sick and dying. Our economy began faulting and was becoming severely affected by supply chain shortages, due to the shutdown of China and most other economies as well as other major disruptions, and we were told not to go to work. However, the programs that were fast-tracked were successful in that they were able to keep our economy and a majority of our citizens above water. The real dilemma was that an excessive amount of money was put out into the market. But if more checks and balances were initially thought-out and planned there could have been less money stolen and more available for those who desperately needed it. Inflation became the overriding issue and was the result of the excessive outlay of money that was mostly digitally sent out to banks to keep them solvent as well as a portion that was actually printed.

The lowest interest rates on record became a windfall for those able to borrow at such reduced costs that inflation began to occur with all the spending that was occurring with the limited supplies. It was a basic supply-demand economics situation; low supply and high demand equaled higher prices and the inflation that goes along with it. My professional opinion is that rates should have been increased slowly as far back as 2021, when the Fed Chair, Jerome Powell first noticed inflation began rearing its’ ugly head, saying it was transitional and would eventually