With the eviction moratorium levied by the Centers for Disease Control (CDC) lapsing on July 31, both the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) have extended their respective eviction bans for foreclosed borrowers.
Both agencies have extended the bans to Sept. 30. President Joe Biden urged Congress to extend the eviction ban earlier this week after the Supreme Court said that the CDC’s ban — the most far-reaching of the various eviction bans enacted by the government — could no longer be extended without “clear and specific Congressional authorization.”
Democratic leaders in the House tried but failed to muster enough votes for such a legislation, ultimately canceling a Friday vote on the matter. House Speaker Nancy Pelosi, D-Calif., denied that the bill had been pulled completely, offering some hope for Congressional action to proponents of the ban. But opposition from the right, as well as resistance from moderates and stakeholders within the housing and lending industries, likely would have ensured the bill’s failure in the Senate even if it passed the House.
Several organizations within the mortgage and real estate spheres have campaigned fiercely of late against the continuation of the various eviction moratoria, asserting that extending the bans would both encumber lenders and landlords who aren’t getting paid and increase the debt burden on borrowers and renters when the ban finally ends. A coalition of 12 trade groups representing lenders, bankers, landlords and other real estate professionals sent a joint letter to the Biden administration in June arguing that federal eviction moratoria should be allowed to expire. With Biden holding firm, more than a dozen groups this week came together for another joint letter, this time to the Senate and the Departments of the Treasury and Housing and Urban Development urging the rejection of further eviction ban extensions.
Nevertheless, the FHA and FHFA cited the housing needs of potentially foreclosed borrowers in extending their respective moratoria.
“The pandemic continues to have an outsized impact on the ability of Americans to meet their monthly rent or mortgage payments. Today’s extension of the eviction moratorium protects particularly vulnerable Americans who otherwise would be at risk of losing a place to live,” said Sandra L. Thompson, acting director of the FHFA.
“We must continue to do everything within our authority to make sure that foreclosed borrowers who are impacted by the pandemic have the time and resources to secure safe and stable housing, whether it’s in their current homes, or by obtaining alternative housing options,” said Principal Deputy Assistant Secretary for Housing Lopa P. Kolluri of the FHA’s extension. “We don’t want to see any individuals or families displaced unnecessarily while trying to recover from the pandemic.”
The FHA and FHFA extensions only affect the agencies’ respective stock of foreclosed properties, although it’s anticipated that other federal agencies will follow suit with extensions of their own. The foreclosure moratorium on federally-backed mortgages remains to sunset on July 31. Lenders may initiate or continue foreclosures once the foreclosure ban lifts, but foreclosed borrowers with loans backed by the FHA, Fannie Mae or Freddie Mac will not be able to be evicted.
