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Feds Grant Extension on Foreclosure and REO Eviction Moratoria

Both the Federal Housing Finance Agency (FHFA) and the Center for Disease Control (CDC) Thursday announced one-month extensions to COVID-related moratoria on foreclosures and evictions. Those were set to expire at the end of the month.

The FHFA foreclosure moratorium applies to single-family mortgages backed by Fannie Mae and Freddie Mac and properties that have been acquired by one of these government-sponsored enterprises through foreclosure or deed-in-lieu of foreclosure transactions.

FHFA's notice came on the heels of the CDC announcing what it says will be the final one-month extension of a moratorium on residential evictions enacted last September to "further prevent the spread of COVID-19," according to the CDC order, which was updated Thursday.

CDC Director Rochelle Walensky signed the extension of the CDC eviction moratorium, which prevents the ousting of tenants from rental homes and apartments. It was scheduled to expire at the end of June. Walensky has noted that the moratorium is now extended through July 31, adding that "this is intended to be the final extension of the moratorium."

White House press secretary Jen Psaki said in a press conference earlier this week that bans on evictions for renters and mortgage holders were “always intended to be temporary.”

The CDC order goes on to reiterate the CDC's initial reasoning for the moratorium, that "keeping people in their homes and out of crowded or congregate settings—like homeless shelters—by preventing evictions is a key step in helping to stop the spread of COVID-19."

A Biden administration official tells the Associated Press that this upcoming month will be used for an “all hands on deck multi-agency campaign to prevent a massive wave of evictions."

Dozens of members of Congress earlier this week wrote to Biden and Walensky calling for the moratorium to be not only extended but also improved in some ways. The letter called for an unspecified extension that would allow the nearly $47 billion in emergency rental assistance included in the American Rescue Plan to get into tenants' hands.

"The impact of the federal moratorium cannot be understated, and the need to strengthen and extend it is an urgent matter of health, racial, and economic justice," the letter read.

Rep. Maxine Waters, Chairwoman of the House Financial Services Committee this week sent a letter to the U.S. Department of Housing and Urban Development (HUD)U.S. Department of Agriculture (USDA)U.S. Department of Veterans Affairs (VA)Consumer Financial Protection Bureau (CFPB), and the Federal Housing Finance Agency (FHFA) requesting that these agencies extend their moratoria on foreclosures at least until the CFPB is able to finalize and implement its pandemic recovery mortgage servicing rule.

"We must not forget the economic events that have brought us to our current day situation. In the aftermath of the 2008 financial crisis, millions of families lost their homes to mass foreclosures," said Rep. Waters. "I commend the administration for its extension of the foreclosure moratorium, and it is now in the hands of the Consumer Financial Protection Bureau to ensure its rulemaking on mortgage servicing requirements is finalized and effective by the end of July to avoid any gaps in protections for homeowners. If we do not learn from our mistakes of the past and act in the greatest interest of everyday people, our nation stands to lose another generation of homeowners and experience an exacerbation of our current homelessness and affordable housing crises. I commend the Biden Administration for its ‘all-of-government’ approach to keep people safely in their homes.”

The mortgage finance industry and housing finance professionals have expressed mixed reactions to eviction bans. And the CDC moratorium last fall triggered what the Washington Post called a "flurry of lawsuits," with landlords, lobbyists, and housing industry groups launching an all-out "legal war" in opposition. Many lawyers have argued the CDC had no right to enact it. The CDC and the Justice Department in a pronouncement last fall clarified that landlords are allowed to start eviction processes while the federal moratorium is active.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.
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