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A wave of foreclosures and evictions threatens to arrive when pandemic-related pauses expire later this year, and the Consumer Financial Protection Bureau is considering restrictions on mortgage servicers that would spread the hit into 2022, the New York Times reported. More than 3 million households are behind on their mortgage payments, and nearly 1.7 million will run out their forbearance periods in September, according to the bureau. “We are at really an unusual point in history,” said Diane Thompson, a senior adviser at the bureau. “I don’t think anybody has ever before seen this many mortgages in forbearance at one time that are expected to exit at one time.” So the bureau has come up with a proposal to ensure that homeowners don’t go straight from forbearance to foreclosure. The agency proposed a new rule that would prevent servicers from starting foreclosure proceedings until after Dec. 31. The intent, bureau officials said, is to give borrowers coming off forbearance time to consider their options, such as whether they need a mortgage modification to reduce their monthly payments. The restriction would apply only to mortgages on homes used as primary residences. The agency also proposed a rule change that would allow servicers to extend loan modification offers to borrowers experiencing a COVID-related hardship without undertaking the full review normally required to adjust a mortgage. The intention is to let lenders quickly offer borrowers more affordable terms, so long as the change does not increase the borrower’s monthly payment or extend the loan’s term by more than 40 years.

The mortgage market is humming, but getting approved for a home loan is as difficult as it has been in years, the Wall Street Journal reported. Mortgage credit availability, a measure of lenders’ willingness to issue mortgages, is near its lowest level since 2014, according to the Mortgage Bankers Association, or MBA. The tight lending environment illustrates a growing cleavage in the mortgage market: More home loans are being made than almost ever before, but they are going almost exclusively to borrowers with pristine credit histories and sizable down payments. Borrowers with credit qualifications that fall just outside the stellar category are finding fewer lenders willing to approve their applications. A segment of borrowers who would have qualified for a home loan early last year are now out of luck, deemed too much of a credit risk. “Because mortgage credit is more difficult to obtain, it is a more competitive environment overall,” said Dr. Lawrence Yun, chief economist at the National Association of Realtors. About 70% of mortgages issued in 2020 went to borrowers with credit scores of at least 760, up from 61% in 2019, according to the Federal Reserve Bank of New York. The median credit score of borrowers approved for mortgages reached 786 in the fourth quarter of 2020, up from 770 during the same period in 2019.

The U.S. Center for Disease Control and Prevention extended an eviction moratorium until June this year due to coronavirus, while regulators launched probes into whether renters have been improperly kicked out of their residences, Bloomberg News reported. CDC Director Dr. Rochelle Walensky signed an order on Monday extending the suspension until June 30, just days before it was set to expire at the end of this month. The move bars landords from evicting tenants who can’t make rental payments amid the pandemic. President Biden asked the CDC to extend bans on evictions and foreclosures shortly after his inauguration, in a bid to mitigate the dual economic and health crises spurred by COVID-19, which has left more than half a million Americans dead, and millions more unemployed and deep in debt. Following the announcement from the CDC, the acting heads of the Consumer Financial Protection Bureau and the Federal Trade Commission said they had also started investigating “deceptive and unfair” eviction practices, focusing on the actions of multistate landlords, private-equity firms and eviction-management services.

Millions of homeowners have been excluded from federal protections providing pandemic-related mortgage-payment relief. Now, many who have suffered setbacks during the public health emergency find their homes are at risk, MarketWatch.com reported. While homeowners with mortgages backed by the federally chartered Fannie Mae or Freddie Mac or by the federal government can qualify for up to 18 months of pandemic-related forbearance and are shielded by a foreclosure moratorium that extends through the end of June, among other protections, there’s no nationwide relief for loans that are not federally backed. The result: Non–federally backed borrowers are sometimes offered only short-term payment suspensions and relatively unaffordable repayment plans, and, in the worst cases, they’ve received no relief and lost their homes midpandemic. Their fate often depends on the identity of the loan holder. Many of these loans are held in bank portfolios, where the bank has considerable discretion to offer the type of relief it sees fit, while others are owned by smaller investors or packaged into private-label securities, where the deal documents can govern what types of relief servicers can offer to borrowers.

Americans extracted more cash from their homes through cash-out refinancings in 2020 than in any year since the financial crisis, the Wall Street Journal reported. U.S. homeowners cashed out $152.7 billion in home equity last year, a 42% increase from 2019 and the most since 2007, according to mortgage-finance giant Freddie Mac. It was a blockbuster year for mortgage originations in general as well: Lenders churned out more mortgages than ever in 2020, fueled by about $2.8 trillion in refis, according to mortgage-data firm Black Knight Inc. Some borrowers viewed cash-out refis as a way to cushion themselves against an uncertain economy last year. Others wanted to build and redecorate, and being stuck at home gave them the time to do the paperwork. Homeowners also had more equity available to tap: Though home prices tend to fall during economic downturns, they jumped during the Covid-19 recession. The median existing-home price rose to about $310,000 in December, an increase of almost 13% from December 2019. The acceleration in price growth has spread past cities to suburban and rural areas as Americans re-evaluate where they want to live during and after the pandemic. Cash-out refis got a bad rap after they exploded in the run-up to the 2008 financial crisis. Borrowers tapped their homes like they were ATMs. When home prices plunged, they were left owing more than their homes were worth. Now, in 2021, many economists expect home prices to keep growing.