Federal Government Developing More Foreclosure Protections

Millions of American property owners are behind on mortgage payments and facing the prospect of foreclosure and eviction later this year.

April 9, 2021, 5:00 AM PDT

By James Brasuell @CasualBrasuell

Bank Owned

Olivier Le Queinec / Shutterstock

Kelly Anne Smith reports on the latest efforts by the federal government to the stem an expected flood of foreclosures as pandemic mortgage protections expire later this year.

"A new rule proposal from the Consumer Financial Protection Bureau (CFPB), a federal agency tasked with protecting consumers by enforcing federal consumer financial laws, would create a new pre-eviction review period to grant millions of Americans more time to figure out payment options before Covid-19 federal mortgage protections expire at the end of June," reports Smith.

In February, the Biden administration worked with the U.S. Department of Housing and Urban Development, the Department of Veterans Affairs, and the Department of Agriculture to extend existing foreclosure moratoriums for federally backed mortgage loans, including FHA-insured, VA-guaranteed, and USDA loans, through at least June 30, 2021, according to a separate article by Amy Loftsgordon. Smith notes despite those protections, millions of evictions have occurred through the pandemic despite protections from the centers for Disease Control. Foreclosure sales have also persisted despite federal, state, and local protections.

With uncertainty risking the financial security of both renters and landlords, the CFPB is working to add new protections as the threat of a large wave of evictions continues to loom. The CFPB cited data "estimating nearly 1.7 million borrowers will exit forbearance programs, where a lender allows borrowers to stop making payments for a period of time, in September and the following months," according to Smith. Nearly 2.1 million homeowners in forbearance are already past the 90-day delinquency period, according to CFPB data cited by Smith.

As for more detail about how the proposed foreclosure eviction protections would work, the new rule "would apply to both federally-backed and private mortgages for primary residences," according to Smith. "Until now, federal mortgage protections have only applied to federally-backed mortgage loans. According to the National Housing Law Project, 14.5 million (30%) of all mortgages are privately held."

"Current rules require borrowers to be 120 days delinquent before the foreclosure process can start," and the new rule would loosen "make the process of getting a homeowner into an affordable payment agreement faster, and with less paperwork."

Wednesday, April 7, 2021 in Forbes

Chicago Commute

Planning for Congestion Relief

The third and final installment of Planetizen's examination of the role of the planning profession in both perpetuating and solving traffic congestion.

May 12, 2022 - James Brasuell

Twin Cities

Minneapolis Housing Plan a Success—Not for the Reason You Think

Housing advocates praise the city’s move to eliminate single-family zoning by legalizing triplexes on single-family lots, but that isn’t why housing construction is growing.

May 13, 2022 - Reason

LAX Cars

Car Noise Is Killing Us

It’s not just traffic collisions that kill—a new study from researcher at Rutgers finds that the loud noises emanating from cars has direct impact on heart health in Americans.

May 6, 2022 - Streetsblog USA

State Capital of Utah

Affordable Housing Proposal Faces Backlash in Salt Lake City

A public hearing last week revealed widespread opposition to a plan to loosen density and height limits and reduce parking requirements to encourage more developers to build affordable housing.

35 minutes ago - The Salt Lake Tribune

Two people on a bike trail with downtown Houston in the background

Houston Bike Summit Makes In-Person Return

The event will focus on improving bike safety and continuing maintenance on the city's growing network of bike lanes and trails.

1 hour ago - Houston Public Media

Austin Bus

Austin’s Transit CEO Moving to D.C.

After overseeing a major system redesign and plans for its largest-ever expansion, the head of Capital Metro will take over Washington, D.C.’s transit agency.

2 hours ago - KUT

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Hand Drawing Master Plans

This course aims to provide an introduction into Urban Design Sketching focused on how to hand draw master plans using a mix of colored markers.