September 19, 2021

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Mortgage News

CDC Extends Renter Eviction Moratorium To October 3

The Centers for Disease Control and Prevention has extended a moratorium on evictions until October 3, the agency said late today.

The pandemic-era bans on tenant eviction largely ended in late July, but government agencies such as the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) had extended bans on properties under their jurisdiction through September.

This new announcement could keep millions of tents affected by the pandemic in their homes. But it’s limited to areas of the country with high or significant Covid-19 transmission, the agency said.

“In the context of a pandemic, eviction moratoriums – such as quarantine, isolation and social distancing – can be effective public health measures to prevent the spread of communicable diseases. Eviction moratoriums facilitate self-isolation and self-quarantine for people who become sick or at risk of transmitting COVID-19 by keeping people out of meeting places and in their own homes, ”the statement said.

President Biden has urged other federal agencies to take similar steps and urged Congress to extend the national eviction moratorium.

The Consumer Financial Protection Bureau released a new online tool last week to help those facing rent arrears and evictions that are not covered by the renewals.

That Rental assistance finder is intended to help tenants and landlords to easily find and apply for payments for rent, utilities and other expenses, the agency said in a statement.

The CDC oversees the implementation of the national Eviction moratorium, while HUD, VA, USDA, and FHFA each have their own Foreclosure moratorium with similar terms.

Proponents of fair housing say ending these protections could lead to a spike in homelessness without proper planning to contain it.

Evacuation protection for tenants extended

The Center for Budget and Policy Priorities estimates 10 million renters are behind on their payments, with up to 26 percent of all renters in some states facing potential evictions.

As early as June, the administration extended the national eviction moratorium to the end of July to give tenants more time to recover from their COVID-related housing shortage and give local authorities more time to distribute tenant relief, according to Biden administration officials.

The administration stressed that these funds will be used to implement “eviction diversion tactics” that would allow defaulting tenants to stay in their homes while helping landlords offset some of their financial losses.

“Diversion strategies like these can help families stay in their homes while protecting landlords’ rights. And they’re also a huge asset to the state’s judicial systems, ”an administrative official said in June, as these courts are facing a long backlog on potential eviction cases. In this way, aid to tenants’ retention also relieves the legal system.

Foreclosure moratorium on homeowners

The moratorium on foreclosure was also extended through the end of the month, and some states have extended beyond that. Federal agencies that sponsor mortgages, including the HUD, VA, USDA, and FHFA, should use this time to help homeowners learn about alternatives to foreclosure in hopes of preventing a wave of homeowner removals later this summer, said administrative officials.

However, housing experts have found that foreclosures are relative unlikely in the current real estate market, because rapidly rising property prices mean that many homeowners have some equity even if they are behind on their mortgage payments.

In addition to extending the foreclosure moratoria, the HUD, VA and USDA extended the deadline for new mortgage deferral requests to September 30th. indulgence allows homeowners to temporarily suspend their mortgage payments, but does not cancel any of the debt.

The FHFA, which oversees Fannie Mae and Freddie Mac, will continue to have mortgage deferral rights.

Bottom line

The coronavirus pandemic turned household finances upside down for many, and national eviction and foreclosure moratoriums were designed to ensure people didn’t lose their homes as a result. This latest addition to these safeguards is designed to give regulators more time to allocate resources and educate affected residents about their options for the future.

Some states also have their own supplemental guidelines that keep renters and homeowners in place even after the national guidelines expire.

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