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The Biden administration is rushing to avoid millions of evictions during a brutally hot summer with a push to get billions of dollars in rental assistance out to tenants and landlords, The Hill reported. The Centers for Disease Control and Prevention (CDC) last week issued what will likely be the final extension of its eviction moratorium, essentially lighting the fuse on a potential eviction time bomb. “It really raises the stakes for all of us,” said Gene Sperling, the White House COVID-19 aid czar, on a Monday webinar hosted by the National Low Income Housing Coalition. Democratic lawmakers and housing advocates who fiercely supported the CDC’s earlier eviction bans have been silent on calling for a longer extension but have voiced concerns about several obstacles hindering the White House’s rental aid efforts. “This is the right thing to do to prevent increases in homelessness as Congress and the administration work together to ensure pandemic housing relief provided by Congress,” said Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee. “Extending the moratoria until local communities can distribute this relief will be the difference between millions of families losing or remaining in their homes.” The Treasury Department has already disbursed the entirety of roughly $46 billion in rental aid approved through several COVID-19 relief laws intended to keep renters current with landlords they have been unable to pay during the pandemic. Even so, it’s unclear how much of that aid has actually made it to either landlords or tenants with just over a month before the ban expires.

Millions of homeowners who are behind on their mortgage payments would get added protections from foreclosure through the end of 2021 under a set of rules completed yesterday by the Consumer Financial Protection Bureau (CFPB), the Wall Street Journal reported. Under the rules, mortgage lenders generally can’t foreclose on a home without first contacting homeowners to see if they qualify for a lower interest rate or some other loan change that makes it easier to repay. “We want servicers and homeowners to be actively engaged in loss-mitigation throughout the summer and the fall so that we can get as many people as possible to a good outcome,” Diane Thompson, a senior adviser to the agency’s acting director, said on a call with reporters. If a modification isn’t possible or a homeowner doesn’t respond—or the property is unoccupied—the foreclosure can proceed after the rules go into effect on Aug. 31. The purpose of the rules, agency officials said, is to ensure that mortgage companies thoroughly process the large number of borrowers expected to exit from temporary pandemic-relief programs that have allowed homeowners to postpone monthly payments until the fall. CFPB officials say they want to prevent any avoidable foreclosures. An existing foreclosure moratorium for borrowers with mortgages backed by the federal government currently expires July 31. A preliminary version of the rules could have effectively forbidden any foreclosures until 2022. Agency officials said that proposal might have given some mortgage services a disincentive to help borrowers this year.

Relief programs created during the COVID-19 pandemic provided many Americans with pauses on their largest debts, particularly mortgages and student loans. Other people came to agreements with auto loan and credit card lenders about payment. This relief helped many people survive, freeing up money to pay for necessities. But forbearance does not equal forgiveness, according to a commentary in The Hill written by Profs. Pamela Foohey of the Benjamin N. Cardozo School of Law, Dalié Jiménez of the University of California, Irvine School of Law and Christopher K. Odinet of the University of Iowa College of Law. People will have to face the debt obligations that come with mortgages, auto loans, credit cards and student loans. Yet in the interim, people have faced persistent unemployment and depleted what little savings they may have had. Many will likely be unable to resume all of their regular debt payments. And people who did not need forbearance during the pandemic may find themselves in danger of defaulting on their debts, according to the commentary. The pandemic disproportionately harmed communities of color, particularly Black women. Given these households’ pre-existing wealth disparities, Black Americans and other minorities are likely to bear the brunt of the economic fallout of the pandemic, according to the commentary. Part of this fallout will be a need to ask their lenders for loan modifications. The professors are calling on the Consumer Financial Protection Bureau (CFPB) to use its authority to prevent what we term modification failures. This is when a borrower’s ability to repay is intentionally, negligently, or merely inattentively not taken into account during loan modification discussions. The CFPB has the authority to identify abusive acts or practices by a wide-range of financial institutions, including issuers and servicers of certain auto loans, credit cards and other installment or revolving loans. It can issue a compliance and enforcement bulletin directing loan servicers to make a reasonable determination that a borrower has the ability to make all required, scheduled payments in connection with any modification. Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

The Biden administration mounted an aggressive push reshaping national housing policy in a span of 48 hours this past week, replacing a key regulator and pushing a flurry of other changes to try to address growing concerns within and outside the White House about a housing crisis for millions of renters and vulnerable Americans, the Washington Post reported. On Wednesday, the White House named an acting director of the powerful Federal Housing Finance Agency, Sandra L. Thompson, who called out the lack of affordable housing and access to credit for many communities of color. The White House appointed her hours after tossing a Trump appointee. Then on Thursday, the Centers for Disease Control and Prevention extended its eviction moratorium by one month. The Biden administration also announced initiatives to quicken the disbursal of rental relief and encourage local governments and courts to prevent evictions. As part of the effort, the White House will convene a summit this Wednesday for “immediate eviction prevention plans” to prevent an “eviction crisis.” Housing has emerged as one of the most unequal and consequential parts of the economic recovery from the coronavirus pandemic. Low interest rates, cheap mortgages and bidding wars are fueling a housing boom for wealthier Americans and making homeownership out of reach for many first-time buyers. Meanwhile, housing is a top expense and worry for millions of renters and unemployed workers, and advocates fear a wave of homelessness once the CDC’s final moratorium lifts July 31. Though Congress has allocated roughly $46 billion for emergency rental aid through pandemic-era aid packages, much of that money hasn’t reached tenants. On Thursday, the White House and Treasury Department released new guidance to help streamline application processes, calling for an “all hands-on-deck effort,” which is partly why the White House’s housing summit on Wednesday will bring together 50 cities to discuss plans for preventing evictions. The delays in getting relief in the hands of vulnerable tenants is a key reason advocates were clamoring for an extension to the eviction moratorium.

President Joe Biden will move immediately to replace the director of the Federal Housing Finance Agency, Mark Calabria, an appointee of former President Donald Trump with broad powers over mortgage giants Fannie Mae and Freddie Mac, Bloomberg News reported. The U.S. Supreme Court opened the door for Calabria’s removal with a Wednesday ruling that made clear the president had the authority to oust the regulator. A White House official responded by saying Biden would start the process of inserting an FHFA director who supports the administration’s priorities on housing policy. The official asked not to be identified discussing Biden’s intentions. In addition to paving the way for Calabria’s removal, the Supreme Court also dealt a crushing blow to Fannie and Freddie shareholders who are challenging the government’s collection of more than $100 billion of the companies’ profits. The justices rejected claims that the FHFA exceeded its authority under federal law, leaving investors few options to get their hands on funds they’ve been seeking for years. Read more.

In related news, President Biden yesterday designated Sandra L. Thompson as the acting director of the Federal Housing Finance Agency (FHFA) after ousting the agency’s previous chief earlier in the day, The Hill reported. Thompson will lead FHFA, the conservator and overseer of Fannie Mae and Freddie Mac, until a full-time nominee is confirmed by the Senate. Biden has not yet chosen a permanent replacement for Mark Calabria, a Trump appointee who led FHFA since 2019 until he was dismissed by the president Wednesday. Thompson has served as deputy director of FHFA’s Division of Housing Mission and Goals (DHMG) since 2013. She joined FHFA after more than 23 years at the Federal Deposit Insurance Corp. (FDIC). Read more.

U.S. home prices in May experienced their biggest annual increase in more than two decades, as a shortage of properties and low borrowing rates fueled demand, the Wall Street Journal reported. The median existing-home sales price in May topped $350,000 for the first time, the National Association of Realtors said Tuesday. The figure was nearly 24% higher than a year ago, the biggest year-over-year price increase NAR has recorded in data going back to 1999. Sales prices have been climbing sharply since last summer, when lockdowns related to the COVID-19 pandemic eased across the country and many people rushed to find more space and bigger homes. Others working remotely seized on the chance to move to a less expensive city. The price increase is contributing to a slowdown in the pace of home sales. Existing-home sales fell 0.9% in May from April, marking the fourth straight month of declining sales, NAR said. Sales are also slipping because there aren’t enough homes on the market to meet demand, say economists and real-estate agents. Homes that are for sale are moving quickly. The typical home that sold in May spent 17 days on the market, matching the record low reached in April, NAR said. Buyers with limited cash for down payments are struggling the most to compete. Just over half of existing-home buyers in May who used mortgages put at least 20% down, according to a NAR survey.

The Consumer Financial Protection Bureau (CFPB) in coming weeks will adopt a rule requiring mortgage servicers to give struggling homeowners until next year to resume repayments, but is expected to carve out some groups of borrowers following industry pushback, Reuters reported. The CFPB in April proposed, among other measures, a new review process that would generally prohibit mortgage servicers from starting a foreclosure until after Dec. 31, 2021. The rule will throw a lifeline to hundreds of thousands of homeowners due to exit COVID-19 mortgage holiday or "forbearance" programs in coming months. The CFPB plans to finalize the rule and make it effective before the end of August, but has agreed to carve out certain groups of borrowers after the industry said that the proposal was too broad and beyond the CFPB's legal remit. A CFPB spokesperson said the agency is working on finalizing the proposal but did not comment on what exclusions had been agreed to.

In the turbocharged housing market, prices are surging and homes on the market are routinely selling for far more than the listing price. Those who can’t afford big down payments are often the ones losing out, the Wall Street Journal reported. Half of existing-home buyers in April who used mortgages put at least 20% down, according to a National Association of Realtors survey. In 10 years of record-keeping, that percentage has hit or exceeded 50% three times, and all have been since last fall. A quarter of existing-home buyers in April paid cash, the highest level since 2017, NAR said. Home prices are surging. The median existing-home price rose 19% from a year earlier to $341,600 in April, a record high, according to NAR. That is largely because there aren’t enough homes on the market to meet demand. In such a housing market, sellers can often choose among multiple offers. Cash buyers have an advantage because they don’t need to secure mortgages, which can make the transaction go faster. Sellers sometimes worry that offers with smaller down payments are likelier to fall through during the loan-closing process, agents say.

The Federal Housing Administration is relaxing the way it assesses student-loan debt when weighing eligibility for homebuying assistance as the Biden administration pushes to help lower-income borrowers and narrow a racial gap in homeownership, the Wall Street Journal reported. The changes, which were presented in a letter to lenders late Thursday, are intended to allow more borrowers to qualify for loans backed by the FHA, a unit of the Department of Housing and Urban Development that provides insurance on mortgages to first-time and lower-income home buyers. Prospective home buyers who qualify for FHA help typically have lower credit scores than individuals with other government-backed loans — such as those guaranteed by Fannie Mae and Freddie Mac — and they are disproportionately Black and Hispanic, according to data collected by federal regulators. The surge in student debt over the past two decades has coincided with historically low homeownership rates among younger households. Some researchers say the phenomena are linked. Relaxing the way it factors in student debt will bring the FHA more in line with other government-backed mortgage programs, such as Fannie and Freddie, which also eased their criteria in recent years. The Biden administration is proposing more down-payment assistance for Black homeownership and taking a number of other measures to fulfill a pledge to address racial equity in housing.