65% of mortgages will be protected by government moratorium on foreclosures

WASHINGTON (Sinclair Broadcast Group) — Millions of American homeowners will be protected from foreclosure and eviction after the country's largest mortgage-holders announced a 60-day moratorium in response to the coronavirus pandemic.

On Wednesday, the Department of Housing and Urban Development announced that all single-family homeowners with Federal Housing Administration-backed mortgages would be shielded from foreclosure or eviction until mid-May.

The announcement came as Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend all foreclosures for "at least 60 days." Earlier this month, FHFA offered payment forbearance to homeowners affected by COVID-19, allowing them to suspend mortgage payments for up to 12 months.

"The health and safety of the American people is of the utmost importance to the Department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times," said HUD Secretary Ben Carson.

According to data compiled by the Urban Institute, the moratoria will cover about 65% of all outstanding mortgages.

Altogether, the FHA and the government-sponsored enterprises, Fannie Mae and Freddie Mac, insure or guarantee $6.88 trillion of the total $10.65 trillion of outstanding mortgage debt.

"That is certainly welcome news and positive news," said Karan Kaul, a housing policy researcher at the Urban Institute. "If you're impacted by the crisis and you have a loan that's in foreclosure or the lender was about to foreclose on a property, you get a huge breather."

The FHA action will be particularly impactful, Kaul noted, because many of its borrowers are disproportionately lower-income individuals from communities of color. "So, this is a really important program for helping folks who are going to be pretty vulnerable."

STATES AND CITIES FILLING THE GAPS

While the federal measures will cover a large swath of the housing market, not every American will be protected from the wave of economic hardship brought on by the coronavirus.

Approximately 44 million Americans rent their homes. The elderly, a group that is among the most vulnerable to the virus, also tend to be at high risk of housing insecurity.

At the same time, the coronavirus has ground entire sections of the economy to a halt. Unemployment insurance claims skyrocketed 33% between the first and second weeks of March. According to Federal Reserve data, about 40% of Americans are unable to cover an emergency $400 expense.

Some states and municipalities have started taking actions that could help close the gaps and ensure that people can stay in their homes during the pandemic.

The Eviction Lab at Princeton University has documented about a dozen states and about a dozen cities and counties that are temporarily halting evictions, according to spokesperson Alieza Durana.

The Miami-Dade Police Department announced Thursday its officers would no longer assist with evictions "until further notice."

The Boston Housing Authority halted all "non-essential" evictions for the duration of the public health crisis.

In San Antonio, the Housing Authority of Bexar County has temporarily suspended all non-criminal evictions.

Similar freezes are taking effect in Austin, Baltimore, Cook County, Illinois, which includes the city of Chicago, Cleveland, Denver, New Orleans, Orlando, Philadelphia and Washington D.C.

California Gov. Gavin Newsom issued an executive order Monday, allowing local governments to halt evictions and protect against utility shut-offs.

In Washington, Gov. Jay Inslee ordered a 30-day statewide moratorium on residential evictions.

Other states taking steps to protect homeowners and renters are Deleware, Connecticut, Kentucky, Massachusetts, Minnesota, New York, Ohio and Oregon.

"It's not comprehensive, but its a start," Durana said. The Eviction Lab documented the various state and local actions.

From a public health perspective, there is also a strong argument to be made for keeping people in their homes.

"Eviction can be absolutely devastating for individuals and families under normal circumstances but in this instance, the effects of eviction on the pandemic could be huge," Durana emphasized.

Those who lose their homes can sometimes move in or double up with other family members. According to a World Health Organization report, as much as 85% of the spread of the coronavirus in China occurred between family members or in shared households.

Another consequence could be individuals being forced into homeless shelters, which are not well-equipped to respond to a contagious disease pandemic. Moreover, homeless populations tend to be more severely affected by communicable diseases, like the flu or strep throat.

"Right now. we need to be thinking about the health and housing measures that can ensure family and community well-being in this unprecedented historical moment," Durana said.

U.S. housing policy varies across states and localities. JustShelter.org has a comprehensive database of community resources to help individuals who may be facing eviction.