With Eviction Moratorium Expired, Clyburn Urges Action by Fannie, Freddie to Keep People in Their Homes
Washington, D.C. (July 27, 2020) — Today, Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent letters to Hugh Frater, Chief Executive Officer of Fannie Mae, and David Brickman, Chief Executive Officer of Freddie Mac, urging the government-sponsored enterprises (GSEs) to take immediate steps to help homeowners and renters in homes with federally-backed mortgages avoid foreclosure and eviction.
“In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included protections for renters and homeowners, as well as enhanced unemployment insurance payments,” the Chairman wrote. “However, the Act’s eviction moratorium expired last week, and the unemployment assistance is set to expire within days. As a result, millions of Americans are now in danger of losing their homes in the middle of a public health crisis. Urgent action is needed to protect homeowners and renters, especially people of color, who have disproportionately suffered from the economic hardship caused by the coronavirus.”
On July 25, 2020, the federal moratorium on evictions for tenants living in properties with federally-backed mortgages expired. Experts predict that as many as 23 million people may be evicted by September if no further federal government action is taken.
In an effort to prevent immediate evictions of tenants who are past due on their rent, Chairman Clyburn requested that the GSEs direct servicers of federally-backed mortgages to notify borrowers that they are prohibited from requiring a tenant to vacate a residential unit until 30 days after the date on which the tenant receives a notice to vacate.
“For the estimated 13 million adults behind on rent as of July 7, this 30-day period may be essential to find alternative housing and avoid homelessness,” the Chairman wrote.
The Chairman also requested that the GSEs direct mortgage servicers to notify all borrowers of the terms and availability of mortgage forbearance under the CARES Act. Nearly 9 million homeowners reported to the Census Bureau that they had missed a payment on their mortgage in the past month. Data suggests that people of color are at disproportionate risk of losing their homes because they are not getting federal assistance at the same rates as white homeowners.
Homeowners were 90% more likely to report that they did not pay their mortgage than that they have received mortgage forbearance from their servicer. While one in three white homeowners with delinquent mortgages received forbearance, less than one in four Black homeowners with delinquent mortgages received forbearance, according to the Census Bureau survey.
In addition to urging the GSEs to ensure borrowers and renters are aware of federal protections to stay in their homes, the letters also seek information on indicators of the looming housing crisis, including in communities of color.
Click here to read today’s letter to Fannie Mae.
Click here to read today’s letter to Freddie Mac.