The Department of Housing and Urban Development on Thursday extended bans on single-family foreclosures and evictions one month to March 31 at the direction of the Biden administration.
“President Biden asked the Department of Housing and Urban Development to consider an immediate extension of eviction and foreclosure moratoriums on federally-backed single-family mortgages. In order to provide much-needed economic relief and support to working families, HUD has implemented the President’s requests,” HUD’s Acting Secretary Matthew Ammon said in a press release issued Thursday.
The extension of the ban on foreclosures for Federal Housing Administration and Public and Indian Housing loans to March 31 fulfilled expectations that government housing agencies would generally expand the scope of consumer housing relief amid the transition in Washington to Democratic leadership. The U.S. Department of Agriculture, for example, also has extended its ban.
Just prior to the inauguration, the Federal Housing Finance Agency extended its single-family foreclosure and eviction deadline from Jan. 31 to Feb. 28, and will likely extend them further.
Moves at individual agencies are likely stop-gap measures as the Biden administration’s $1.9 trillion stimulus plan proposes to extend the bans and allow forbearance through Sept. 30.
The administration’s plan and the foreclosure and eviction bans have gotten mixed reviews from the industry.
Data provider CoreLogic on Tuesday credited the more than 20-year low in the vacancy rates in single-family homes with helping to “maintain stability for rent prices despite economic challenges.” Those low vacancy rates stem largely from the eviction ban.
In contrast, Richard Kruse, principal at distressed asset manager Gryphon USA, said in a press release issued Monday that he is concerned about the backlog and runup in costs resulting from the eviction ban.
Kruse expressed concern that the stimulus plan might not cover its costs, although he noted that the number is “hard to quantify.”
National Council of State Housing Agencies estimates suggest tenants in the larger rental market had between $34 billion and $70 billion in past-due rents as of Dec. 31. The plan as outlined on Jan. 14 would allocate $30 billion in rental assistance, Kruse noted.
“At a maximum, billions in newly printed money pays some back rent and pays some delinquent utilities,” Kruse said. “Tenants are still behind, landlords are potentially still behind, and there is still no plan for what happens next.”
Some political consultants expect the final form of the stimulus package could move the end date for foreclosure and eviction bans up a few months.
“Keep in mind that this is a starting point that will be negotiated in Congress. I doubt that the rent relief will be negotiated down in this environment, but the moratoriums could be pared back to say the end of June,” said Tim Rood, head of industry relations at SitusAMC, in a report posted online Thursday.“The topic likely will be heavily debated.”
