Rep. Maxine Waters, Chairwoman of the House Financial Services Committee has 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. The letter also calls on the CFPB to strengthen and finalize its mortgage servicing rule to better protect homeowners by ensuring they have an opportunity to finalize affordable loan modifications with their lender and prevent unnecessary foreclosures.
With the emergency federal foreclosure moratorium set to end on June 30, 2021, Waters is seeking an extension to ensure that homeowners do not experience a lapse in protections and face unnecessary foreclosures before housing counseling funds and Homeowner Assistance Funds provided through the American Rescue Plan Act have reached communities and households.
“Any lapse in coverage threatens to have a disproportionate impact on lower income homeowners and homeowners of color who stand to gain the most from these protections and assistance,” said Waters in the letter.
Sent to Marcia L. Fudge, Secretary of HUD; Thomas Vilsack, Secretary of the USDA; Denis McDonough, Secretary of the VA; Dave Uejio, Acting Director of the CFPB; and Mark Calabria, Director of the FHFA, Waters is requesting an extension of the federal foreclosure moratorium through August 2021.
“I commend CFPB for its attention to mortgage servicing issues at such a critical time, as many borrowers’ forbearance periods are set to expire as early as September 2021,” said Waters. “Although vaccinations have increased protections against the coronavirus itself, measures addressing systemic financial risks remain to be seen in the fallout of the pandemic crisis … As we saw in the last recession, any lapse in foreclosure protections at this time stands to threaten the housing stability and wealth-building opportunities for generations of households of color.”
The CFPB forecasts that there may be nearly 1.7 million loans at least 90 days delinquent come September 2021. Foreclosures have an average cost to borrowers of at least $12,500, with neighboring homes also losing value, and sale prices dropping by 1%-1.6% after nearby foreclosure sales. And according to a March CFPB report, Black and Hispanic homeowners were more than two times as likely to be behind on housing payments as of December 2020.
Click here to read the full letter from Rep. Waters.