By Sydney Sullivan
Sometimes (most of the time) we have to wonder – whose bright idea was the foreclosure and eviction moratorium? Did they have no sense of consequence? The idea in and of itself was good at the time – but the execution leaves a lot to be desired. Why in the world would the Congress agree to a moratorium of mortgage payments be allowed to use a “forbearance” program?! Here we go again.
March 1, 2021
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NEW REPORT FROM CONSUMER FINANCIAL PROTECTION BUREAU FINDS OVER 11 MILLION FAMILIES AT RISK OF LOSING HOUSING Federal foreclosure moratorium slated to end June 30, 2021 WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued a report that warns of widespread evictions and foreclosures once federal, state, and local pandemic protections come to an end, absent additional public and private action. Over 11 million families are behind on their rent or mortgage payments: 2.1 million families are behind at least three months on mortgage payments, while 8.8 million are behind on rent. Homeowners alone are estimated to owe almost $90 billion in missed payments. The last time this many families were behind on their mortgages was during the Great Recession.
“We have very little time to prevent millions of families from losing their homes to eviction and foreclosure,” warns CFPB Acting Director Dave Uejio. “At the CFPB, we are working hard to help homeowners and renters as the U.S. begins to turn a painful crisis, caused by the pandemic, into a robust recovery. We know small landlords are struggling, too, with many dipping into savings or using credit cards to make it through the pandemic. We want everyone—homeowners and renters, landlords, and mortgage servicers—to have the tools they need now to avoid unnecessary evictions and foreclosures.”
The Federal government is going to great lengths to protect homeowners and renters. Recent actions by the Federal Housing Finance Agency, the Federal Housing Administration, the Department of Veterans Affairs, and the U.S. Department of Agriculture prohibit lenders from foreclosing on most mortgages until June 30, 2021. After that date, families who cannot resume making regular payments will need to make an agreement with their lender to avoid foreclosure. Residential eviction protections for renters are extended through March 31, 2021. U.S. families suffering from the economic impacts of the pandemic are at enormous risk of losing their housing. According to the CFPB report:
- Black and Hispanic families are more than twice as likely to report being behind on housing payments than white families.
- While mortgage forbearance – the option to pause or reduce payments temporarily – has dropped foreclosures to historic lows, 1 million homeowners are more than 90 days behind on payments and are likely to experience severe financial hardship when payments resume. Of these families, an estimated 263,000 families are seriously behind on their mortgages and not in forbearance, putting them at higher risk of foreclosure once federal and state moratoria end.
- 9 percent of renters, who do not have the same protections or options as homeowners, report that they are likely to be evicted. Black and Hispanic households are more likely to report being at risk.
- 28 percent of manufactured home residents reported being behind on their housing payments, compared to 12 percent of single-family home residents, and 18 percent of residents in small-to-mid-sized multi-unit buildings.
The CFPB is committed to using all of its authorities to help homeowners and renters as they face the ongoing economic impact of the pandemic. The CFPB report, “Housing Insecurity and the COVID-19 Pandemic,” can be found here. A blog on today’s report can be found here. ### The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
The last financial crash in 2008, as we all know, was a land grab. Here we go again with a COVID “forbearance” program – literally by the same ilk who brought you HAMP. The banks, of course, would go along with a moratorium because they KNOW in a forbearance program the defaults will be astronomical and they can easily grab the land. People are not working, businesses have been closed and there’s hardly enough money for food – let alone foreclosure defense attorneys.
If “landlords are struggling,” it appears, either the landlords are not claiming the rents in their income or their state is hording government funds because there is a government program where they can apply to cover the lost rent. The catch is that the landlord has to have paid taxes on the rental income in the past in order to qualify for eligibility.
January 7, 2021: Treasury launches $25B coronavirus rental assistance program
Even in Hawaii there are Landlords that are refusing COVID stimulus funds.
Let’s face it – this has been a difficult time, but we learn from difficult times and mistakes. And not being able to remove someone that has abused and/or damaged your property is a helpless feeling. It doesn’t lend credence to the push for long term rental housing.
If you are a homeowner and have opted for the moratorium / forbearance program – it might be wise to look in your land records department now or have a title company search for an Assignment of Mortgage filed in the records.
History has shown us that the banks didn’t file Assignments of Mortgage until the homeowner was in default. So, if you find a recently filed Assignment of Mortgage – prepare yourself for the possibility of a foreclosure notice in the near future.
It’s always good to know where who claims ownership of your mortgage. Asking your servicer for an update of precisely who is (or are) the current investors is a good idea for any homeowner.
As a homeowner, you might want to keep on hand the Mortgage Bankers Association (MBA) letter of March 22, 2020. There are some interesting admissions in this letter. While the MBA was begging for COVID funds for the Servicers, it inadvertently admitted that Servicers paid the Investors any missed payments by the homeowner and that Servicers were reimbursed for any of their advances and expenditures.
MBA – March 22, 2020 – See specifically pages 4-5.
If we had decent Legislators they’d be busy designing a plan to keep American Homeowners from going from forbearance to foreclosure. It would probably be a good idea to call or write your US Congressional Representatives and suggest they get a plan together before June 30, 2021.