More than 8 million families face foreclosure or eviction as moratorium ends

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Even when a nation pushes off coronavirus pandemicMore than 2 million homeowners have defaulted on mortgages and are at risk of being kicked out of their homes within weeks, Harvard University’s new housing report warns.

The majority of homeowners at risk of foreclosure are either low-income or families of color, said researchers who published a 2021 report on the state of housing in the country. Congress devotee The researchers said $ 10 billion to help homeowners pay off, but it’s unclear if that funding will reach families before mortgage companies start sending out foreclosure notices.

In addition, Harvard researchers have found that millions of tenants are “on the verge of eviction.” Census data show that 6 million households are still per rent and could face an eviction in late June when federal eviction protection expires.

The Centers for Disease Control’s order suspends some evictions and federal restrictions on foreclosures for state-backed housing, both expiring on June 30. Housing advocates are pushing for the Biden administration to extend both terms, but there is no indication that an extension will occur.

“With so many tenants struggling financially, there are concerns about an impending wave of evictions,” the Harvard report says.

More than 7 million homeowners have taken advantage of the foreclosure moratorium imposed by Coronavirus Relief, Relief and Economic Security Act The last spring. This position was later extended by the Biden White House. As of March 2021, most of these homeowners have started paying their lenders and some have even updated their lenders’ details. But that leaves about 2.1 million people on mortgages, the researchers said.

Of that number, about 325,000 homeowners have a FHA loan and are held for at least 60 days. They are likely to be people of color, the US Department of Housing and Urban Development said Wednesday.

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Karen King, 51, from Alabama, hopes to be able to strike a deal with her mortgage lender because she cannot afford to pay all payments for five months at once.

Karen King


Karen King, who defaulted on her mortgage in Birmingham, Alabama for five months, told CBS MoneyWatch that she was “scared” that her home might be taken away.

King, 51, of the Tuscaloosa Housing Authority, delayed payments last year after her job switched her to part-time work during the pandemic. She now owes $ 4,200. King returned to full-time work in January, but was only able to pay off her usual monthly mortgage amount – nothing more.

King said she would have to try to negotiate a special payment agreement with her mortgage provider, but she is nervous about this conversation because she’s not sure if the lender will accept the unusual payment plan.

“I can’t necessarily pay extra on the mortgage, so I hope I can negotiate something with them,” King said, adding that she is willing to make five payments at the end of her home loan. “I would have preferred a delay,” she said.

Colored people like King were particularly hard hit by the loss of income during the pandemic, according to researchers at Harvard. As a result, 17% of blacks, 16% of Hispanics and 16% of Asian Americans delayed mortgage payments in early 2021 – more than double the 7% share of white homeowners.

“For those households with guaranteed jobs and quality housing, their homes have become safe havens from the pandemic,” Harvard researcher Chris Herbert said in a statement. “But for the millions of people struggling to cover their rent or mortgage, their housing situation is becoming increasingly insecure, and these imbalances are likely to persist even after the economy recovers.”

The home ownership gap persists

The report also highlighted a sharp rise in home prices since mid-2020, a shortage of homes available for sale nationwide, and disparities in home ownership between black and white Americans.

According to researchers, the proportion of black homeowners in the first quarter of 2021 was 46%, compared with 74% among white Americans. According to them, statistically, the gap has improved slightly, but the numbers “are still large by historical standards.”

The gap remains largely due to the difference in income between black and white households, the researchers said. In 2019, the median income of a white-headed family was $ 76,100; According to the census, for a black-headed family, that amount was only $ 45,000.

“Accumulating the savings needed to make the down payment and close the deal is difficult for most new buyers, but especially for colored tenant households,” says the report, which was funded by Wells Fargo, Habitat for Humanity, the National Association of Realtors. and the National Association of Home Builders.

The report recommends investing more money in initial payment assistance programs offered by state and local governments, and channeling that money towards people of color.

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