Biden’s consumer protection agency to help people avoid foreclosures
- The moratorium on foreclosures was lifted at the end of July, putting millions of homeowners at risk.
- The Consumer Financial Protection Bureau has released new rules to help prevent foreclosures.
- The rules would establish safeguards and require mortgage agents to increase awareness of borrowers.
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To provide financial assistance to homeowners during the pandemic, President Joe Biden has imposed a moratorium on foreclosures to keep people safe in their homes. With the ban expiring at the end of July, Biden is not extending it but is also working to reduce foreclosures as much as possible.
On Monday, the Consumer Financial Protection Bureau (CFPB), which ensures consumers are treated fairly, released new rules to facilitate a smooth transition once the foreclosure ban expires. “As the country moves from the COVID-19 emergency to economic recovery, we cannot be content with the dangers we still face,” CFPB Acting Director Dave Uejio said in a statement.
More than 7 million homeowners took advantage of the foreclosure moratorium during the pandemic, according to a press release, and today 2 million homeowners are still on hold.
The rules will establish temporary guarantees so borrowers have time to determine their options before foreclosure. Mortgage agents will also receive new guidelines to best help borrowers avoid foreclosures. The new rules:
- Require agents to respect temporary procedural guarantees before initiating foreclosures for certain mortgages;
- Enable repairers to streamline the loan modification process for borrowers;
- And require agents to increase their reach with borrowers before making foreclosures.
The new rules will take effect on August 31, 2021.
“An uncontrolled wave of foreclosures would drain billions of dollars in wealth from the black and Hispanic communities hardest hit by the pandemic and still recovering from the impact of the Great
a little over a decade ago. An uncontrolled wave of foreclosures would also risk destabilizing the housing market for all consumers. “
This is not the first step the Biden administration has taken to help tenants and landlords during and beyond the pandemic. Last week, for example, the Center for Disease Control and Prevention (CDC) extended the moratorium on evictions for an additional month until July.
Two weeks ago, the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD) announced new calculations to determine the mortgage aid that would make it easier for people with student debt to buy a home. , especially people of color.
“For people of color, especially blacks, property is wealth,” said HUD Secretary Marcia Fudge. “It is not only a wealth for us, but it is a generational wealth.”