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CFPB Issues Relief Resources for Homeowners

For borrowers who may be facing foreclosure, the Consumer Financial Protection Bureau has released several resources to help consumers take steps to protect their finances during the COVID-19 pandemic, including a reminder to consumers to contact their lenders if they cannot make their payments. Many lenders are now providing forbearance loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. The Federal Housing Finance Agency has authorized Fannie Mae and Freddie Mac to enter into additional dollar-roll transactions—provide mortgage-back securities investors with short-term financing.

Those with loans backed by Fannie Mae or Freddie Mac may be granted a foreclosure moratorium and forbearance, and several private institutions including Wells Fargo are following suit by suspending residential property foreclosure sales and evictions.

Fannie Mae and Freddie Mac also announced mortgage deferment programs. Effective January 1, 2021, Freddie Mac will launch a loss mitigation solution for borrowers who became delinquent due to a short-term hardship that has since been resolved.

Additionally, suspension of foreclosures and evictions for mortgages backed by the U.S. Department of Housing and Urban Development (HUD) and FHFA will extend at least 60 days.

There were a total of 48,004 U.S. properties with foreclosure filings in February 2020, according to the latest U.S. Foreclosure Market Report from ATTOM Data Solutions. This is the lowest number of total foreclosure filings recorded since ATTOM began tracking in April 2005, but according to Todd Teta, ATTOM’s Chief Product Officer, as lenders suspend foreclosure filings due to COVID-19, this number is likely to continue to drop until after moratoriums are lifted.

“Foreclosure activity across the United States hit new lows in February, yet another marker of the nation’s long housing boom,” said Teta. “However, as with just about anything connected to the housing market right now, the foreclosure situation is now totally in flux because of the ever-evolving coronavirus pandemic. Many lenders have suspended foreclosure proceedings, so the numbers will most likely continue to drop in the coming months. But after that, we may see an uptick in foreclosures as a result of dramatic economic impacts, such as more homeowners losing their jobs and falling behind on mortgage payments.”

Nationwide, one in every 2,841 housing units had a foreclosure filing in February 2020. States with the highest foreclosure rates were New Jersey (one in every 1,457 housing units with a foreclosure filing); Illinois (one in every 1,507 housing units); Delaware (one in every 1,628 housing units); South Carolina (one in every 1,688 housing units); and Maryland (one in every 1,713 housing units).

Lenders started the foreclosure process on 27,058 U.S. properties in February 2020, up 3% from last month but down 9% from a year ago — the thirteenth consecutive month showing an annual decline.

States that saw double digit increases in foreclosure starts from last month included: Nevada (up 63%); Oregon (up 49%); Washington (up 47%); Texas (up 28%); and Michigan (up 20%).

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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