Industry Update
March 1, 2021
Source: CFPB
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, 2.1 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: Housing insecurity and the COVID-19 pandemic
A blog on today’s report can be found here: New report highlights housing insecurity and the need for aggressive action
