More than 11 million families — nearly 10% of U.S. households — are at risk of eviction or foreclosure because of the economic impact of the coronavirus pandemic, the Consumer Financial Protection Bureau said Monday.
In a report analyzing effects of the pandemic on the housing market, the bureau said roughly 2.1 million families are at least three months behind on mortgage payments, while 8.8 million tenants are behind on their rent.
In all, roughly 28% of residents in manufactured homes, 18% of those in multi-family buildings and 12% of those in single-family homes are behind on their housing payments as of December 2020, the CFPB in the
In a press release accompanying the report, acting CFPB Director Dave Uejio cited an urgency for policymakers to act. He suggested there will noticeable consequences when federal and state measures to help households weather the economic fallout from COVID-19, including forbearance plans, begin to expire.
“We are working hard to help homeowners and renters as the U.S. begins to turn a painful crisis, caused by the pandemic, into a robust recovery,” Uejio said. “We know small landlords are struggling, too, with many dipping into savings or using credit cards to make it through the pandemic. We want everyone — homeowners and renters, landlords, and mortgage servicers — to have the tools they need now to avoid unnecessary evictions and foreclosures.”
Black and Hispanic homeowners were more than twice as likely to have fallen behind on housing payments than white homeowners, the report found.
“Many households will face difficulties navigating significant payment arrearages or permanent income losses,” the report said.
The Biden administration has extended the length of
The CFPB said that 263,000 borrowers are “of particular risk” because they are more than 90 days behind on their mortgages but have not yet signed up to delay mortgage payments through forbearance plans. Many will have limited options to avoid foreclosure if they do not contact their mortgage servicers, the bureau said.
The report also noted that “long forbearance can erode equity,” and cites “the impact of forbearance and foreclosure on home values and neighborhoods.”
However, homeowners have fared far better than renters since there are no formal policies allowing renters to defer payments, the agency said.
Though some renters are protected by eviction suspensions, thousands are still evicted every week. The average delinquent renter is more than three months behind and owes more than $5,000 of missed rent and utilities, according to Moody's Analytics. Collectively, delinquent renters owe an estimated $44.1 billion in total back rent, the CFPB said, citing Moody’s.
Black and Hispanic households are more than twice as likely to be renters than white households, so an eviction crisis would fall hardest on communities of color, the CFPB said.
The report does not make any specific recommendations, but it cites recommendations by consumer advocates that the government dedicate $100 billion to cover the payments of low-income renters. In December, the federal government set aside $25 billion for the Emergency Rental Assistance program to assist renters.
