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U.S. Housing Boom Rescues More Than 1 Million ‘Underwater’ Homes

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The pandemic housing boom has pulled more than 1 million U.S. homeowners out of a debt trap that many had been stuck in since the great financial crisis more than a decade earlier, Bloomberg News reported. The number of homes that are considered seriously underwater — meaning that loans secured by the property are at least 25% higher than its market value — dropped to 2.25 million in the second quarter, down from 3.5 million at the end of 2019, according to the latest home-equity report by real estate data firm Attom. Chicago, Philadelphia and New York were among the urban areas that saw the biggest declines in the number of underwater homes. The number of homes nationwide that are classified as “equity-rich,” meaning their value is at least double the outstanding loan balance, jumped by 4.2 million in the same period. They now account for 34.4% of all mortgaged properties, up from 26.7% at the end of 2019.
 

Biden Administration Issues a New Eviction Moratorium After a Federal Ban Lapsed

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Days after a national eviction moratorium expired, the Biden administration on Tuesday issued a new, more limited freeze that remains in effect through Oct. 3, NPR reported. Like the previous order, the two-month moratorium issued Tuesday comes from the Centers for Disease Control and Prevention. The new ban on evictions covers parts of the United States that are experiencing what the CDC calls "substantial" and "high" spread of the coronavirus. As of Tuesday afternoon, that's the vast majority of U.S. counties. The order, which cites the rise of the delta variant, says: "Without this Order, evictions in these [higher transmission] areas would likely exacerbate the increase in cases." The federal ban expired Saturday night, affecting millions of Americans who had the potential to be removed from their homes if they had fallen behind on rent. Since that moratorium's expiration, progressives had pressured the Biden administration to extend the pause on evictions. The administration previously said it didn't have the legal authority to issue a such a measure. The new order could face legal challenges. Gene Sperling, who oversees the White House's rollout of COVID-19 relief, told reporters on Monday that Biden had "quadruple-checked" whether he had the legal grounds to extend the moratorium unilaterally but said ultimately his hands were tied by a Supreme Court ruling that blocked the CDC from extending its past moratorium beyond the end of July. A last-minute effort by Congress to extend the ban failed.

CDC Can’t Stop Evictions, as Biden Calls on States to Act

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The White House said yesterday that the Centers for Disease Control and Prevention was “unable to find legal authority for a new, targeted eviction moratorium” and asked that states and local governments put in policies to keep renters in their homes, the Associated Press reported. Mass evictions could potentially worsen the recent spread of the COVID-19 delta variant as roughly 1.4 million households told the Census Bureau they could “very likely” be evicted from their rentals in the next two months. Another 2.2 million say they’re “somewhat likely” to be evicted. The prospect of mass evictions has led to criticism that the Biden administration was slow to address the end of the moratorium, which expired over the weekend. But the White House says that it lacks the authority to extend a national moratorium. That’s largely because the Supreme Court signaled in a 5-4 vote in late June that it wouldn’t back further extensions, with Justice Brett Kavanaugh writing that Congress would have to act to extend the moratorium. The White House noted that state-level efforts to stop evictions would spare a third of the country from evictions over the next month.

Homeowners Without Traditional Mortgages Are Eligible for Federal Aid

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States can allocate some of the $10 billion in federal funding for struggling homeowners to help people who bought their residences with nontraditional home loans, according to Treasury Department officials, the New York Times reported. Guidance issued yesterday for the new Homeowner Assistance Fund allows states to provide financial aid to qualified residents who face foreclosure on a loan for a mobile home or a home acquired through a contract for deed — a loan financed by the seller of the property. Some elderly residents who have taken out a reverse mortgage on their homes — a deal in which borrowers can get cash for the equity in their house — may also qualify for the emergency assistance money. Advocates and some state governments had prodded the Treasury Department to extend the program’s support to those who do not have traditional mortgages. A handful of states, including Texas and New York, drew up preliminary plans that would allow them to allocate some of the money in the Homeowner Assistance Fund to those with mobile homes or houses acquired through contracts for deed, which are sometimes called land contracts.

Eviction Ban’s Expiration Leaves Renters in South Appearing Most Vulnerable

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A national ban on most residential evictions expired after Saturday, setting the stage for a potentially widespread displacement of low-income renters that looks poised to hit Southern states particularly hard, the Wall Street Journal reported. Meanwhile, only about $3 billion out of $46.6 billion in federal rental assistance meant to prevent tenant evictions and help struggling landlords had reached landlords and tenants by the end of June, according to the U.S. Treasury Department, which noted that the pace at which local programs were disbursing the funds has been increasing. The federal Centers for Disease Control and Prevention enacted the eviction ban in September to prevent evictions of millions of tenants who were unable to pay rent because of financial hardship during the pandemic. The CDC has extended the moratorium three times. The White House said on Wednesday that only the U.S. Congress could extend it again, citing a Supreme Court ruling that limited the CDC’s power to renew it. But lawmakers failed to reach an agreement to renew the ban.

Biden Calls on Congress to Extend Eviction Ban with Days Until Expiration

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The White House called on Congress to pass an emergency extension of the Centers for Disease Control and Prevention's (CDC) eviction ban yesterday, three days before it expires, insisting the administration does not have the legal power to extend it after a recent Supreme Court ruling, The Hill reported. “Given the recent spread of the delta variant, including among those Americans both most likely to face evictions and lacking vaccinations, President Biden would have strongly supported a decision by the CDC to further extend this eviction moratorium to protect renters at this moment of heightened vulnerability,” White House press secretary Jen Psaki said in a statement. "Unfortunately, the Supreme Court has made clear that this option is no longer available," she added. The Supreme Court last month left intact the CDC’s moratorium on evictions by a 5-4 vote, with Chief Justice John Roberts and Justice Brett Kavanaugh joined with the court’s three liberals. But Kavanaugh also said he agreed with a federal judge’s determination that the CDC had exceeded its authority in enacting the moratorium and argued that it could not be extended again unless by an act of Congress. For that reason, another extension could be reversed by the court if it is challenged by one of the moratorium's many opponents.

Selling Out: America's Local Landlords. Moving In: Big Investors

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Beset by COVID-19 and its fallout, local landlords are offloading their properties to cash-rich institutional investors, and America's real-estate market may never be the same, Reuters reported. Before the pandemic, boyhood friends Michael Murano and Richard Tyson owned 96 rental units in their hometown of Rochester, New York. They offered accommodation to low-income tenants, many in the service industry, from rooming houses to single-family starter homes. Today, they're well on their way to liquidating the entire portfolio. Two-thirds of the units are already gone. The buyers? Large investors with all-cash offers. Many of America's landlords have gone a year and a half without being paid by tenants, who've been protected by several state and local eviction moratoria as well as an umbrella federal ban enacted 11 months ago. The owners have been waiting for $46 billion to help them survive without that income. The funds were approved by Congress months ago, but bureaucracy creaks; only $3 billion has reached them so far, according to U.S. Treasury Department data.