Agency Proposes Banning US Home Foreclosures for a Year

Agency Proposes Banning US Home Foreclosures for a Year house keys lay on top of a foreclosure notice (Dreamstime)

By Eric Mack | Monday, 05 April 2021 09:45 PM

With families facing financial issues after the coronavirus pandemic shutdowns left millions of Americans out of income for extended periods of the past year, the U.S. is proposing banning home foreclosures until the next year.

The Consumer Financial Protection Bureau announced the proposal Monday in a news conference, CBS News reported.

"We've seen a shocking increase in housing insecurity, with millions living precariously and months behind on mortgages or rent," acting CFPB Director Dave Uejio told reporters.

Nearly 3 million homeowners are behind on their mortgage, including 2.1 million at least 90 days behind, according to the CFPB.

That count is doubled since the start of the pandemic and 6% of mortgages were delinquent as of December, more than any time since the Great Recession valley of 2010, the agency reported.

"We will do everything in our power to ensure servicers work with struggling families to find solutions that prevent avoidable foreclosures," Uejio told reporters.

There is a May 10 deadline by the CFPB for comments on the proposal, which could be put into effect in September.

"We fully embrace the idea of helping troubled borrowers stay in their homes," Cowen Washington Research Group's Jaret Seiberg wrote in a report, according to CBS News. "Foreclosures hurt borrowers, servicers, lenders and communities. There is no upside to proceeding with foreclosures when there are restructurings available that could help borrowers get current on their mortgages."