The House Financial Services Committee held a virtual roundtable to discuss the impact COVID-19 has had on the U.S. Housing Market.
“The harmful effects of this pandemic on the physical and mental health, financial stability, and overall way of being can be even more devastating when you are unable to pay your rent or mortgage,” said Rep. William Lacy Clay, Chairman of the Subcommittee on Housing, Community Development, and Insurance.
He added that while Congress has passed trillions of dollars in stimulus packages, including the proposed $3 trillion HEROES Act, there is “much more that needs to be done.
“One of the most important things that we can do to respond to this pandemic, is to keep people in their homes,” said Maxine Waters, Chairwoman of the House Financial Services Committee.
She added the pandemic could have created a wave of foreclosures and evictions that would have made it harder for the economy to recover.
Clay said there are lessons to be learned from the Great Recession, which saw African-American homeownership fall 23%. Clay added that while many are recovering the downturn a decade ago, COVID-19 is “disproportionately” hitting minority households.
Rep. Steve Stivers, Ranking Member of the Subcommittee on Housing, Community Development, and Insurance, said Congress has taken “extraordinary” steps to address the issues and impacts of COVID-19.
“Workers who aren’t getting paid because of the health crisis can’t pay their rent or their monthly mortgage, so the CARES Act provided forbearance for mortgage payments and protected renters from evictions,” Stivers said.
He noted that there was widespread confusion over forbearance measures and come homeowners said they “lack clarity” from servicers on what they owe. Stivers, however, praised the Federal Housing Finance Agency for not only providing clarity, but also announcing lump sum payments are not required when leaving forbearance.
The roundtable included insight from Kristy Fercho, Chairwoman of the Mortgage Bankers Association (MBA) of President of Mortgage for Flagstar Bank. She said mortgage servicers have played an “integral role in providing an unprecedented amount of payment relief for customers.”
She added since March, MBA members have provided forbearance to more than four million customers and loans in forbearance have grown to more than 8%. Also, the average wait time for a customer has fallen from 13 minutes to 2 minutes.
Jenny Schuetz, Fellow, Metropolitan Policy Program,, Future of the Middle Class Initiative, said that eviction moratorium put in place by the CARES act, while an attractive short-term solution, is “not a long-term solution.”
She said the moratoriums could lead to rents accumulating more debt they cannot pay off, cause ripple effects as the lack of payments are needed for landlords, and it could discourage people from being landlords moving forward.
Also appearing on the roundtable was Diane Yentel, President and CEO, National Low Income Housing Coalition, said: “patchwork” eviction moratoriums approved by Congress offer short-term relief, but there is now a “financial cliff” when rent is owed after the pandemic.
She added Congress should enact a universal moratorium on evictions during the duration of the pandemic. She also said Congress should provide the $100 billion in renter insurance, as proposed in the HEROES Act.