CFPB Study: 11 Million Families at Risk of Losing Housing

With federal foreclosure moratoria slated to end June 30, the Consumer Financial Protection Bureau this week issued a report warning of widespread evictions and foreclosures, absent additional public and private action.

The report notes more than 11 million families are behind on their rent or mortgage payments: 2.1 million families are behind at least three months on mortgage payments, while 8.8 million are behind on rent. Homeowners alone are estimated to owe nearly $90 billion in missed payments. The last time this many families were behind on their mortgages was during the Great Recession.

“We have very little time to prevent millions of families from losing their homes to eviction and foreclosure,” said CFPB Acting Director Dave Uejio. “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.”

The report notes recent actions by the Federal Housing Finance Agency, the Federal Housing Administration, the Department of Veterans Affairs and the U.S. Department of Agriculture prohibit lenders from foreclosing on most mortgages until June 30. After that date, families who cannot resume making regular payments will need to make an agreement with their lender to avoid foreclosure. Residential eviction protections for renters are extended through March 31. 

“U.S. families suffering from the economic impacts of the pandemic are at enormous risk of losing their housing,” the report said. Other key findings:

• Black and Hispanic families are more than twice as likely to report being behind on housing payments than white families.
• While mortgage forbearance – the option to pause or reduce payments temporarily – has dropped foreclosures to historic lows, 1 million homeowners are more than 90 days behind on payments and are likely to experience severe financial hardship when payments resume. Of these families, an estimated 263,000families are seriously behind on their mortgages and not in forbearance, putting them at higher risk of foreclosure once federal and state moratoria end.
• 9 percent of renters, who do not have the same protections or options as homeowners, report that they are likely to be evicted. Black and Hispanic households are more likely to report being at risk.
• 28 percent of manufactured home residents reported being behind on their housing payments, compared to 12 percent of single-family home residents, and 18 percent of residents in small-to-mid-sized multi-unit buildings.

The report, “Housing Insecurity and the COVID-19 Pandemic,” can be found here. A blog can be found here.