Feds propose prohibiting US foreclosures until 2022

[Yo_Mama_Been_Loggin]

The Consumer Financial Protection Bureau (CFPB) on Monday proposed banning foreclosures until 2022 as many families risk facing losing their homes as federal protections during the pandemic expire.

"We've seen a shocking increase in housing insecurity, with millions living precariously and months behind on mortgages or rent," acting CFPB Director Dave Uejio said during a news conference, CBS News reports.

The CFPB's proposal involves preventing foreclosure by providing a pre-foreclosure review period for those behind on their mortgage that would restrict loan servicers from starting foreclosures until 2022.

The amount of homeowners behind on their mortgage has doubled since the pandemic began, CBS News reports. Of the 3 million behind on their mortgage payments, around 2.1 million are at least 90 days behind.

https://www.msn.com/en-us/news/politics/feds-propose-prohibiting-us-foreclosures-until-2022/ar-BB1fkCuR

[WHITT]

1. Good Proposal

I was thinking about this issue when I was driving around listening to somebody from MarketWatch on the radio claiming that there wouldn't be a big fallout when forbearance ends in June, because they claimed homeowners have more equity in their homes and they have been given lots of "support".

The problem with that is normally you would have layoffs, then people would go back to the jobs they had, and they could just do a refi and roll all the accrual of past due principal, interest, taxes and perhaps insurance premiums that were advanced by their servicers during the forbearance period into the new mortgage. But a lot of these folks report themselves as laid-off instead of unemployed, but there are really no jobs for them to return to, so if they get new jobs, mortgage underwriters want to see two years of pay stubs before they will consider providing a mortgage, which will leave homeowners between a rock and a hard place.

Secondly, there 18-19 million on unemployment. No underwriter will provide any kind of mortgage, refi or otherwise, to somebody on unemployment. Again, rock/hard place.

If they don't extend the forbearance , there will be a wave of foreclosures.

[I_UndergroundPanther]

2. And rich people

Will snatch those houses on the cheap when they are foreclosed and they'll have more wealth they don't deserve.