rent mortgage loan
Could government legally temporatiliy halt rent/mortgage/interest payments for the benefit of the greater economy?
<p>I’m not well versed in economics or law by any stretch of the imagination. But I am confused with certain measures taken thus far by the government.</p>

<p>There is currently a temporary shutdown of vast sectors of the economy now and workers affected are not receiving any income.</p>

<p>To me, logic would dictate that here should also be a temporary cessation of payments for rental properties (for small businesses as well as individuals) and, to be fair, a temporary cessation of payments for loans for owners of those properties. In turn, banks would be given temporary cessation payments for interest to its customers since the banks would not receive any payments on loans including payments on mortgages from homeowners. That would essentially close the loop on money flow which again would be temporary and the impact to the greater economy would be limited.</p>

<p>If undue burden is placed on any one of these points in the cycle, and right now, workers and small businesses are taking that brunt, then there could be long-standing damage to the economy from bankruptcies, foreclosures, etc.</p>

<p>The Fed is already addressing the banking side of things by keeping rates close to 0.</p>

<p>Does the government have the authority to push for a standstill in mortgage/interest/rent payments? 
I feel this temporary measure would alleviate economic hardship and prevent long-term damage to the economy.</p>

<p>It depends on the applicable state laws granting emergency powers. The <a href="https://www.governor.wa.gov/sites/default/files/proclamations/20-49%20-%20COVID-19%20Garnishment.pdf" rel="nofollow noreferrer">most recent decree in Washington State</a> suspends garnishments and post-judgment interest. The governor was given broad powers by the legislature (<a href="https://apps.leg.wa.gov/RCW/default.aspx?cite=43.06.220" rel="nofollow noreferrer">RCW 43.06.220</a>) to suspend laws in case of an emergency. If a state has no such powers (every state does) or if a particular action is not within the scope of the governor's emergency powers, then no. Otherwise yes. The governor of Washington has the emergency power to limit assembly, anything to do with flammables, sale of anything related to preservation of life, health and peace, and "other activities as he or she reasonably believes should be prohibited to help preserve and maintain life, health, property or the public peace". He also can suspend government enforcement actions, such as garnishment and post-judgment interest (and court proceedings resulting in judgments), an suspects statutory / regulatory restrictions on actions (could suspend the sales tax). He cannot, however, single-handedly write new laws. There is no existing provision that would allow cancellation of interest obligations, although the legislature has the power to restrict interest in various ways (such as the usury statutes). So without a new power being passed by the legislature, the answer is Washington is "no".</p>

<h2>The government? Yes</h2>

<p>Which part of the government depends on exisiting law. </p>

<p>If a provision of an existing law grants the executive the power to do so than this can be done by executive order. If there is no such law, then the legislature can convene and make such a law - either granting the relief directly or empowering the executive to do so.</p>

<p>There is a risk in the US that such a law would require the government to compensate the owner of the property (land or capital) through the Fifth Amendment’s Takings or Just Compensation Clause: ‘‘nor shall private property be taken for public use without just compensation.’’ However, the courts have been <a href="https://www.cato.org/sites/cato.org/files/serials/files/cato-handbook-policymakers/2009/9/hb111-34.pdf" rel="nofollow noreferrer">reluctant</a> to impose an obligation to compensate on the government particularly as here where it is done for health and safety reasons <em>and</em> it’s not clear that it has been taken for “public” use since private parties (the tenant and borrower) are the beneficiaries.</p>
