Fed proposes to ban US foreclosures until 2022
The Consumer Financial Protection Bureau (CFPB) on Monday proposed to ban foreclosures until 2022, as many families risk losing their homes as federal protections during the pandemic expire.
“We have seen a shocking increase in housing insecurity, with millions of people living in precariousness and months behind on mortgages or rent,” CFPB Acting Director Dave Uejio said during of a press conference. CBS News Reports.
The CFPB’s proposal is to prevent foreclosures by providing a pre-foreclosure review period for those behind on their mortgages, which would prevent lending services from starting foreclosures until 2022.
The number of homeowners behind on their mortgages has doubled since the start of the pandemic, reports CBS News. Of the $ 3 million behind on their mortgage payments, about $ 2.1 million are at least 90 days late.
The CFPB has proposed putting in place “safeguards” to protect lending services in the event that mortgage borrowers default on their loans, including allowing services to provide homeowners with means to reduce their mortgage payments.
“We will do everything in our power to ensure that service agents work with struggling families to find solutions that prevent preventable foreclosures,” Uejio added.
Comments on the proposal must be made by May 10 and the rule could go into effect from September.
The Centers for Disease Control and Prevention last week extended the national moratorium on evictions until June 30 when more than 10 million Americans currently face housing insecurity. The moratorium does not cancel unpaid rents, as tenants are still required to repay their debts once the moratorium is lifted.
The Biden administration is currently working to distribute nearly $ 40 billion to households in need of assistance covering rent and utilities.