COLUMBUS, Ohio, Feb. 17, 2021 /PRNewswire/ — Gryphon USA president Richard Kruse said the Biden administration’s move this week to extend the 12-month moratorium on home mortgage foreclosures through June 30 undermines the vitality of the nation’s housing market as health and economic conditions that prompted the federal policy begin to subside.
“The unprecedented federal interference into the private housing market due to the COVID-19 pandemic certainly stabilized the shelter of Americans in a healthcare emergency which is positive,” Kruse said. “However, extension of the foreclosure ban beyond the March 31 expiration fails to recognize the success of social distancing and vaccination programs against the initial emergency policy.”
Federal agencies in late December extended the original moratorium to March 31 in recognition that the Biden administration might want to take another look at the situation. They did and have put forward an extreme policy not spending the effort to direct relief at those who truly need it.
Kruse adds that the extension only addresses half of the problem and keeps landlords in the dark regarding how to seek the cash flow to pay their mortgages and maintenance costs.
The new extension is silent on evictions leaving landlords questioning when they may retake possession of their properties that are currently not producing income.
“Landlord complaints of tenants taking advantage of the system even if they could afford payments aren’t even addressed here continuing to show deference to the tenant but not provide recourse to those that provide housing,” says Kruse.
That announcement of a coordinated extension of forbearance of loans backed by the Department of Housing and Urban Development (HUD) follows the Federal Housing Finance Agency’s announcement it would extend its moratoria on loans owned by Fannie Mae and Freddie Mac.
An estimated 1 out of 5 renters are believed to be behind on their rent while 2.7 million homeowners are currently in foreclosure forbearance, according to the White House.
Kruse said lifting of the foreclosure moratorium in July will not immediately mean relief for lenders and landlords as it will take several months for legal actions to commence.
Still, Kruse expressed optimism that the June 30 date will solidify into a real expiration date so the market can begin working out the damage in a post-COVID environment.
For more information on this topic, contact Richard Kruse at 614-774-4118 or [email protected].
SOURCE Gryphon USA