COLUMBUS, Ohio, Jan. 18, 2021 /PRNewswire/ — President-elect Biden’s plan to extend moratorium on evictions another eight months only creates a larger mess for landlords and tenants, Columbus distressed asset manager and foreclosure broker/auctioneer Richard Kruse believes.
Biden has unveiled a $1.9 billion stimulus plan that includes extending the eviction ban to Sept. 30 in a bid “to avoid a flood of foreclosure and eviction filings” awaiting courts in the nearly 10 months since the federal government originally put a Covid moratorium into effect.
“In the end, there will be an even bigger tsunami of evictions and foreclosures,” said Kruse, principal of Gryphon USA. “This is a delay in the market unraveling itself and increases the inevitable consequences.”
Various government agencies had said the moratoria were scheduled to expire at the end of 2020. That has since been extended to January 31 to allow Biden to take office and weigh in on the issue.
In a plan outlined on Jan. 14, the incoming administration plans to ask Congress to approve $30 billion in rental assistance on top of the $25 billion Congress approved in the late 2020 as part of an earlier $900 billion stimulus package.
Kruse, a 25-year-veteran of managing and selling nonperforming real estate for lenders, said even if the various federal agencies hold to the proposed Sept. 30 date, evictions and foreclosures likely wouldn’t take effect until after the Thanksgiving or Christmas 2021 holiday.
He said the extent of the past-due rent and mortgage is hard to quantify. The National Council of State Housing Agencies estimates tenants have between $34 billion and $70 billion in past due rents as of Dec. 31. If correct, the Biden plan barely covers the low range estimates.
“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 other than higher taxes more national debt and looming inflation. The Biden team continues to kick an already dented can down a crumbling road for another year.”
SOURCE Gryphon USA