%1

A contentious new fee on U.S. mortgage refinancings has been delayed until Dec. 1, according to the regulator overseeing mortgage giants Fannie Mae and Freddie Mac, Reuters reported. The 0.5 percent fee, aimed at recouping potentially billions of dollars in losses created by the coronavirus pandemic, was originally set to take effect on Sept. 1. The regulator, the Federal Housing Finance Agency, also said the fee would not apply to mortgages worth less than $125,000. Fannie and Freddie had announced the fee earlier this month amid a boom in refinancings as borrowers looked to take advantage of record-low interest rates. But the new fee was met with swift criticism by the banking industry, consumer groups and members of Congress, who were wary of what the new cost could mean for struggling borrowers and the entire housing market during such a tumultuous economic time.

One of the most successful elements of the government’s response to the coronavirus recession — protecting people on the margins from falling into poverty — is faltering as the safety net shrinks and federal benefits expire, the Washington Post reported. Major recessions are especially fraught for low-income earners, whose finances can veer from tenuous to dire with one missed paycheck. But as the economy cratered this spring, economists and poverty experts were mildly surprised to discover that the torrent of government support that followed — particularly the $600 a week in expanded unemployment benefits and one-time $1,200 stimulus checks — likely lowered the overall poverty rate. In fact, 17 million people would have dropped below the poverty line without the $500 billion in direct intervention for American families, said Zach Parolin, a researcher at Columbia University. Now, data show, those gains are eroding as federal inaction deprives Americans on the financial margins of additional support. If the unemployment rate stays around 10 percent and no new stimulus is delivered, “we can expect poverty rates to rise and climb higher than those observed in the Great Recession,” Parolin said. The poverty threshold for a family of four is $26,200, according to the U.S. Department of Health and Human Services. Data collected by the Census Bureau capture the financial pain. For the week that ended July 21, the most recent numbers available, roughly 29 million U.S. adults — about 12.1 percent — said their household sometimes or often didn’t have enough to eat the preceding seven days, according to the Center on Budget and Policy Priorities. Nearly 15 million renters said they were behind on rent during the same period.

The number of serious mortgage delinquencies rose to a 10-year high in July, according to a report released Friday by financial data firm Black Knight, The Hill reported. The number of homes with mortgage payments more than 90 days past due but not in foreclosure rose by 376,000 in July to a total of 2.25 million, according to Black Knight. Serious mortgage delinquencies are now at the highest level 10 years and have increased by 1.8 million since July 2019. While the total number of delinquent mortgages dropped nearly 7 percent since June, the record rise of serious delinquencies is a troubling sign in the wake of the recent expiration of federal foreclosure and eviction protections. The Coronavirus Aid, Relief and Economic Security (CARES) Act enacted in March imposed a ban on foreclosures and evictions until July 31. The Trump administration and lawmakers failed to reach a deal to extend those protections after they expired, and an executive order issued by President Trump to mitigate the damage may not be sufficient to protect all who are at risk of losing their homes, according to housing advocates.

The Department of Housing and Urban Development says that it will extend a ban on evictions in single-family houses with mortgages issued by the Federal Housing Administration, a protection that would be far narrower than the now-expired eviction moratorium in the CARES Act, CNBC.com reported. The expired moratorium also included properties backed by government-sponsored lenders Fannie May and Freddie Mac, and was estimated to have covered nearly a third of the country’s rental units. “HUD’s new moratorium only applies to a slight fraction of the units covered under the CARES Act and does nothing to protect the overwhelming majority of renters in the United States from eviction and its devastating consequences,” said Emily Benfer, an eviction expert and visiting professor of law at Wake Forest University. The federal eviction moratorium in the CARES Act expired at the end of July, and since it required tenants in protected properties to get 30 days notice of their eviction, proceedings will be able to start as early as next week, said Eric Dunn, director of litigation at the National Housing Law Project. At the same time that federal protections against eviction come to an end, many states that paused their own proceedings have now allowed them to resume. Since July 15, eviction moratoriums have lapsed in Michigan, Maryland, Maine and Indiana. Read more.

In related news, with less than two weeks before a statewide moratorium on renter evictions expires, California lawmakers on yesterday declined to back a plan that would have provided tax credits for landlords while sending a separate proposal that would protect tenants back for additional negotiations with Gov. Gavin Newsom (D), the Los Angeles Times reported. Three other bills dealing with affordable housing and homelessness were also sidelined for the year as the Senate and Assembly appropriations committees rushed to meet an end-of-the-month deadline for acting. The Assembly Appropriations Committee sidelined a measure by state Sen. Anna Caballero (D-Salinas) that would have created a process for preventing evictions for three years as long as a landlord and tenant reach an agreement on forgiving rent in exchange for the landlord receiving a tax credit. Senators moved forward a bill by Assemblyman David Chiu (D-San Francisco) that would prevent evictions for up to a year. The measure, AB 1436, would block evictions of renters who missed payments during the COVID-19 “emergency period,” which would end 90 days after the state of emergency order is lifted or April 1, 2021, whichever occurs first. Landlords would also be allowed mortgage forbearance under the legislation. He cited a U.S. Census Bureau survey from last month that showed 4.3 million renters in California reported “little to no confidence” in their ability to pay rent in August. The measure is opposed by groups including the California Chamber of Commerce and the California Apartment Assn., which represents 50,000 owners and managers. Debra Carlton, an executive vice president of the association, said the delay in rents until 2021 will be a burden for senior landlords who depend on rentals for income and owners who need the revenue to pay mortgages and repairs. Read more.

Additionally, New York Gov. Andrew Cuomo (D) signed an executive order yesterday expanding a coronavirus-related emergency moratorium on evictions and foreclosures of commercial properties until Sept. 20, the New York Post reported. The move gives business owners heavily impacted by state-ordered closures associated with COVID-19 more another month to meet their rental obligations. “While we have made great progress in keeping New York’s infection rate low, this pandemic is not over and as we continue to fight the virus, we are continuing to protect New York businesses and residential tenants who face financial hardship due to COVID,” Cuomo said. It’s an extension from an original March 20 eviction moratorium impacting commercial and residential renters, although Cuomo recently signed another bill allowing tenants some protections if they can prove they’ve been negatively impacted by the coronavirus. But commercial tenants are feeling the crush — and have been for five months. A recent survey by the NYC Hospitality Alliance found over 80 percent of bar and restaurant owners couldn’t pay their full July rent. Nearly 40 percent said they wouldn’t be able to pay at all. Read more.

U.S. home builder confidence rose for a third straight month in August to match its highest level ever as record-low interest rates spur buyer traffic, data released showed showed in the latest indication the housing market is a rare bright spot in the economic crisis triggered by the coronavirus pandemic. At the same time, however, a growing number of home owners are falling behind on their mortgages with tens of millions still out of work and growing signs that the labor market recovery is softening, Reuters reported. The National Association of Home Builders/Wells Fargo Housing Market Index rose 6 points to 78, matching a series record set in 1998. But even as home builder confidence surges, more homeowners affected by the crisis have stopped paying their mortgages, a separate report showed. The delinquency rate for residential mortgages rose to 8.2 percent in the second quarter, up nearly 4 percentage points from the first quarter and the largest quarterly increase on record, according to the Mortgage Bankers Association. Loans backed by the Federal Housing Administration, a program used by many first-time buyers and those with lower incomes, saw their delinquency rate jump to almost 16 percent — the highest since the survey began more than four decades ago.