Foreclosure activity increased over the first quarter of 2021, despite a nationwide pause on foreclosures for homes with government-backed mortgages.
Figures from ATTOM Data Solutions revealed that there was a total of 33,699 properties across the US with foreclosure filings (default notices, scheduled auctions or bank repossessions) during the first quarter of 2021, up 9% from the previous quarter but down 78% from a year ago.
The report also showed a total of 11,880 properties with foreclosure filings in March 2021, up 5% from the previous month but down 75% from March 2020 — the second consecutive month with month-over-month increases in US foreclosure activity.
Foreclosure activity picked up despite the Biden administration announcing an extension of a moratorium on foreclosures through June 30. However, Rick Sharga, executive vice president of analytics firm RealtyTrac, said foreclosure actions on two property types could have caused the increase.
“The foreclosure moratorium on government-backed loans has virtually stopped foreclosure activity over the past year,” said Sharga. “But mortgage servicers have been able to begin foreclosure actions on vacant and abandoned properties, which benefits neighborhoods and communities. It’s likely that these foreclosures are causing the slight uptick we’ve seen over the past few months.”
The number of mortgage applications fell for the sixth consecutive week, according to new data from the Mortgage Bankers Association (MBA).
Figures from MBA revealed that the total number of mortgage applications decreased 3.7% for the week ending April 09, on a seasonally adjusted basis, compared to the week prior.
Refinancing activity also decreased last week, dropping 5% from the previous week, while the seasonally adjusted purchase index decreased 1% week-over-week.
Joel Kan, associate vice president of economic and industry forecasting at MBA, said that the decrease could be attributed to rising rates and a tighter supply of homes.
“Purchase and refinance applications declined, with most of the pullback coming earlier in the week when rates were higher,” said Kan. “Refinance activity has now decreased for nine of the past 10 weeks, as rates have gone from 2.92% to 3.27% over the same period. Last week’s index level was the lowest in over a year, as mortgage rates continue to trend higher. Many borrowers have either already refinanced at lower rates or are unwilling – or unable – to refinance at current rates.”
Additionally, Kan said that declining purchase activity is “a sign that rising home prices and tight supply are constraining home sales – especially in the lower price tiers.”
“Purchase applications were still above last year’s pandemic-impacted low point, but fell behind the level of activity seen the same week in 2019,” concluded Kan.
While forbearance numbers have declined somewhat in recent weeks, around three million homeowners are still behind on their mortgages. As foreclosure moratoriums are set to expire later this year, the housing market is now facing the risk of a shock from millions of homeowners going from forbearance straight into foreclosure. To prevent such a shock to the system, the CFPB has released a proposed set of rule changes for servicers and borrowers to prevent the end of forbearance turning into a catastrophe for the whole mortgage industry.
The CFPB’s proposed rules include giving borrowers more time through a pre-foreclosure “review period” that would keep servicers from foreclosing before 2022, as well as giving servicers more options for streamlined loan modifications for borrowers impacted by the pandemic and making some changes to required servicer communications, ensuring borrowers receive key information about options in a timely manner. While the CFPB has sought input on these rule changes, one analyst believes they’re effectively a fait accomplit, with significant impacts on the whole mortgage industry and housing market.
“Foreclosure represents a bigger risk than we all realize,” said Jane Mason (pictured), founder and CEO of process automation software firm CLARIFIRE and an expert in loss mitigation. “We need to be thinking about underreported data - delinquency numbers aren’t being reported to credit agencies and we’re not sure how delinquent these people are. After 18 months, they’ve been in delinquency for a considerable amount of time. Converting these people to permanent solutions is going to be a big challenge. I don’t think the risk is nearly as big as during the great recession, but I do think the servicers and banks in particular need to pay attention to how they are going to manage the volumes and velocity of these requests.”
Loan application modifications proposed by the CFPB, Mason said, could be particularly effective in developing permanent solutions for delinquent borrowers. Servicers being allowed to accept incomplete applications will take a major burden off servicers and borrowers as both groups can struggle with the sheer quantity of documentation required for all the options they might be eligible for.
While these changes are directly impacting the servicing side of the mortgage equation, Mason believes there’s likely to be impacts in the key handoff between origination and servicing. As originators increasingly encounter borrowers with underreported delinquencies, blemished credit, and significant income volatility, the underwriting credits on these mortgages will become more challenging.
Originators, she claims, will have to pay far more attention to the growing underwriting risk associated with people trying to get out of delinquency using a refinance as a permanent solution. They will have to take a close look at credit and ask themselves what you do when somebody has had no credit for a year.
She believes that to get ready for these looming changes, mortgage professionals need to be communicating with their borrowers en masse, sending surveys and collecting information about how they are doing and their plans for getting back on their feet. It’s important, she believes, to ask if these borrowers know what the end of forbearance is going to mean for them. Servicers need to get their operational side on board, too, and make a full push to turn these communications into meaningful actions now that can safeguard the borrower and the mortgage. As these CFPB rule changes are finalized, the whole team needs to be ready to implement them and prevent forbearance from becoming another foreclosure crisis.
“We have to make sure that our team members, the people working in the servicing shop, not only have a basic familiarity with the policy changes, but they have to be in communication with the borrowers,” Mason said. “I think that’s another place where they can actually assist their operations and assist the borrowers at the same time.”
With judges ruling against a federal eviction ban, pressure mounts on the Biden administration to distribute billions in aid to renters.
The Biden administration again extended a federal moratorium on evictions last week, but conflicting court rulings on whether the ban is legal, plus the difficulty of rolling out nearly $50 billion in federal aid, means the country’s reckoning with its eviction crisis may come sooner than expected. The year-old federal moratorium — which has now been extended through June 30 — has probably kept hundreds of thousands or millions of people from being evicted from their apartments and homes. More than 10 million Americans are behind on rent, according to Moody’s, easily topping the 7 million who lost their homes to foreclosure in the 2008 housing bust.
Despite the unprecedented federal effort to protect tenants, landlords have been chipping away at the moratorium in court. Six lawsuits have made their way before federal judges — with three ruling in support of the ban and three calling it illegal. The opposition started when landlords in Texas sued in the fall, arguing that the Centers for Disease Control and Prevention had overstepped its bounds in implementing the ban. Apartment owners argued in their complaint that they built and maintained apartment buildings “with the reasonable expectation that they would be legally permitted to realize the benefit of their bargain by collecting monthly rent from their tenants.”
District Judge J. Campbell Barker agreed. “Although the COVID-19 pandemic persists, so does the Constitution,” he wrote.
The National Association of Home Builders joined Ohio landlords in another suit. The judge in that case, J. Philip Calabrese, also ruled against the ban, writing March 10 that “the CDC’s orders exceeded the statutory authority Congress gave the agency.” Treasury Department officials have been armed with nearly $50 billion in emergency aid for renters who have fallen behind, and are racing to distribute it through hundreds of state, local and tribal housing agencies, some of which have not created programs yet.
The idea is to get the money to renters before courts nationwide begin processing evictions again. “We are running the Emergency Rental Assistance Program every day like we’re going to lose the moratorium tomorrow,” said a Treasury Department official, who spoke on the condition of anonymity to discuss the program before any formal announcements.
The moratorium was not overly controversial at first and it has received bipartisan support from lawmakers. It was formed when President Donald Trump and Congress directed the CDC to create a form tenants can use to declare that they cannot pay rent because of the pandemic and that they have been unable to secure other housing. Filing the form generally halts eviction proceedings But that was a year ago, which is a long time to go without collecting rent, especially for landlords who own smaller properties and are increasingly facing debts they cannot pay.
This isn’t a concern for the vast majority of owners of high-end apartments catering to professionals, because their tenants can work from home and are far less likely to be unemployed. But it can amount to a financial catastrophe for companies housing low- and moderate-income workers, many of whom were laid off from service and tourism industries and have not been required to pay rent for a year. “Those who have fallen behind in their rent are among the most vulnerable members of society: more likely to be unemployed, with less income and less education,” experts from Moody’s wrote in January. Evictions continue in Virginia despite CDC order extension As months of unpaid rent dragged on, landlords began filing suits nationwide asking judges to strike down the ban. Three have now ruled against it. The rulings in Texas and Ohio did not include injunctions removing the CDC’s ban, and the Justice Department is appealing. Dozens of state and local bans remain in place as well. But days after the Ohio judge’s order came a more concrete ruling against the moratorium, when District Judge Mark Norris in Tennessee ruled that extending the ban had been illegal. He issued an order saying the moratorium was “unenforceable in the Western District of Tennessee.” Advocates say this is the first ruling that may carry severe consequences for thousands of people. More than 19 percent of renters in Tennessee are behind on rent, according to Moody’s. Norris’s district includes Memphis, where landlords have filed more than 13,000 eviction notices in the past year, according to Princeton University’s Eviction Lab. Memphis may be a test case for what the impact will be when the moratorium expires nationwide with eviction filings piled up in courts.
“Tenants in Western Tennessee are at immediate risk,” said Diane Yentel, president and chief executive of the National Low Income Housing Coalition.
Although the CDC ban remains in place, and other judges have upheld it, for Justice Department lawyers, it looks like an increasingly difficult game of whack-a-mole, with each adverse ruling chipping away at the moratorium’s protections. The National Association of Home Builders now argues that the CDC ban should not apply to any of its 1,700 or so members, some of whom own thousands of units. Tenants are already increasingly subject to the rules of their local jurisdictions, as some have halted eviction proceedings altogether while others allow landlords to file eviction papers or to complete evictions for reasons unrelated to the coronavirus pandemic. Landlords also are instituting very different policies from one another, as some are aggressively filing eviction notices against tenants even where local courts are not processing cases, said Jim Baker, an advocate. His group, the Private Equity Stakeholder Project, has reviewed thousands of eviction filings nationwide.
“We have seen dramatically different polices from different landlords,” Baker said. He said some appear to be targeting apartment communities predominantly populated by racial minorities, a disparity the Eviction Lab documented. Baker also found a motion filed as part of an eviction case in Florida in which a landlord’s attorney cited a decision in West Texas, arguing that the CDC ban had been deemed “an unconstitutional overreach into the general police power retained by the states,” even though it did not include an injunction. Banning evictions is not the only strategy for preventing them. Some states and municipalities have provided subsidies to renters who have fallen behind, to prevent them from being evicted. These policies carry an additional benefit by putting money in landlords’ pockets, keeping smaller companies solvent and ideally making all landlords less eager to evict tenants. Bankruptcy filings among real estate companies have significantly increased over previous years. So tenants’ advocates and apartment company lobbyists alike celebrated when the federal government approved about $46.5 billion in emergency rental aid to be distributed to renters and landlords through hundreds of state, local and tribal housing agencies and organizations.
But quickly and efficiently disbursing so much money is no straightforward task. Yentel said recently that only about half the states have created a program to do so. Some landlords have begun saying they won’t accept the money out of concern that too many strings are attached. The Treasury Department has not yet released data on the emergency rental aid program, one of a number of stimulus initiatives deploying unprecedented sums of money.
The U.S. government approved trillions in aid. Many hard-hit families have yet to receive it. “I see progress and that is heartening, but that doesn’t get us to take our feet off the gas,” said the treasury official.
Part of the effort is to assure landlords that they should participate in the program, regardless of how they feel about the moratorium, so they can collect unpaid rent. Landlords should also benefit from payments renters make after receiving money from Congress’s $1.9 trillion stimulus package. “Are there landlords that don’t want to take the money? I am sure there are. But we are really working hard to build that confidence among landlords so that they confidently come in and participate in this program,” the official added.
If the money gets to the tenants and landlords who need it before the ban ends, the onslaught of evictions may be avoided. But given the legal rulings so far, no one can say when the ban will end.
Annual home price appreciation remained on fire in February, rising to its highest level in more than 15 years.
Nationwide, home prices grew at a record year-over-year rate of 11.6% in February, according to Black Knight. Moreover, daily home sales data by the company’s Collateral Analytics group showed an annual 15.9% jump in the median single-family sales price.
“Multiple years of constrained housing inventory and historically low-interest rates have helped fuel this fire to the point where nearly 75% of the 100 largest US markets have seen annual home price growth of 10% or higher,” said Black Knight data & analytics president Ben Graboske. “What’s more, Collateral Analytics’ Market Conditions Report shows the housing markets in 75% of ZIP codes rated either ‘Strong’ or ‘Hot’ based on underlying market metrics. Only 7% are characterized as ‘Normal.’
The sharp increases in both home prices and interest rates have pushed affordability to its lowest point since mid-2019. Graboske said that it now takes 20% of the median household income to make the monthly payment on an average-priced home – back to the five-year average after several years of low-interest rates mitigating the impact of rising prices on affordability.
“Housing is now the least affordable it’s been – factoring in interest rates, home prices and income – since mid-2019,” he said. “Any hopes of 2021 bringing an influx of homes to the market and lessening pressure on prices appear to be dashed for now, as new for-sale listings were down 16% and 21% year-over-year in January and February, respectively.”
There are now 125,000 fewer new listings than in the first two months of 2020, driving for-sale inventory 40% below last year’s level.
“With higher interest rates and a continuing shortage of inventory, it will be important to keep a careful eye on both home prices and affordability metrics in the coming months,” Graboske said.
The Consumer Financial Protection Bureau said Monday it is considering new rules aimed at averting a wave of foreclosures later this year when millions of homeowners are no longer allowed to put off making their mortgage payments.
Last year, the federal government suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration as the coronavirus pandemic left millions of people unemployed. Fannie Mae and Freddie Mac did the same for borrowers in single-family homes with loans backed by the two mortgage buyers. The initiatives offered borrowers relief for up to one year and suspended late charges and penalties.
As of February, nearly three million US homeowners were behind on their home loans, with about 2.1 million mortgages in forbearance and at least 90 days late, according to the CFPB. If current trends continue, there still may be 1.7 million such loans by September, the CFPB said.
One rule proposed by the agency would prohibit mortgage servicers from starting the foreclosure process before Dec. 31. The CFPB is also considering whether to permit servicers to initiate foreclosures before the end of this year, in certain cases, such as if they’ve made efforts to contact an unresponsive borrower.
The CFPB is also weighing a rule that would allow servicers to offer “certain streamlined loan modification options” to borrowers with hardships caused by the pandemic, and changes to ensure servicers are notifying borrowers of their options in a timely basis. The agency is seeking public input on its proposed rule changes through May 11.
For the second consecutive month, pending home sales transactions declined in February as homebuyers continued to face the same low-inventory dilemma.
The pending home sales index fell 10.6% from January to a reading of 110.3 in February, according to the National Association of Realtors. Contract signings dwindled 0.5% year over year. An index of 100 is equal to the level of contract activity in 2001.
“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift, but contracts are not clicking due to record-low inventory,” said NAR chief economist Lawrence Yun. “Only the upper-end market is experiencing more activity because of reasonable supply. Demand, interestingly, does not yet appear to be impacted by recent modest rises in mortgage rates.”
Yun expects rates to hover at no more than 3.5% this year. He said that both prospective buyers and current homeowners looking to refinance can still benefit from the relatively low rates.
“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” Yun said. “If there were a larger pool of inventory to select from – ideally a five- or a six-month supply – then more buyers would be able to purchase properties at an affordable price.”
Each of the four major US regions saw month-over-month declines in February, while results were mixed in the four regions year-over-year.
Pending home sales in the Northeast PHSI was down 9.2% to 92.3 in February, a 3.9% drop from last year. The Midwest was down 9.5% to 102.4, a 6.1% decline from a year ago.
In the South, sales declined 13% month over month and were up 2.9% year over year to a reading of 133.2 in February. The index in the West declined 7.4% month over month and was up 1.9% year over year to 96.9.
Annual US home-price growth remained sky-high in January, soaring 12% year over year, according to the latest Federal Housing Finance Agency House Price Index released Tuesday.
However, house prices nationwide dipped 1% month over month, down from the revised December home-price gain of 1.2%. For the nine census divisions, seasonally adjusted monthly house price changes ranged from -0.2% in the East South Central division to +1.5% in the Mountain division. The 12-month changes ranged from +10.2% in the West South Central division to +14.8% in the Mountain division.
“While house prices experienced historic growth rates in 2020 and into the new year, the monthly gains appear to be moderating,” said Lynn Fisher, deputy director of FHFA’s division of research and statistics. “House prices increased by 1.0% in January, which is relatively still high, but represents the smallest month-over-month gain since June 2020.”
Echoing Fisher’s sentiments, CoreLogic deputy chief economist Selma Hepp predicted that home price growth will continue to decelerate throughout the year.
“While double-digit home price growth has raised concerns about its sustainability, affordability crunch resulting from strong home price growth and higher mortgage rates will discourage some potential homebuyers from entering the market and take some wind out of its sails, slowing the home price growth rate by about a half by the end of 2021,” Hepp said. “The biggest concern remains the lack of for-sale homes. Potential sellers may be discouraged by their inability to find a new home and subsequently choose to not list their own home – leading to a vicious cycle of declining for-sale homes.”
Gov. Andrew Cuomo announced last July that New York would spend $100 million in federal coronavirus relief to help cash-strapped tenants pay months of back rent and avert evictions.
By the end of October, the state had doled out only about $40 million, reaching 15,000 of the nearly 100,000 people looking for help. More than 57,000 applicants were denied because of criteria set by lawmakers that many said was difficult to meet.
New York’s experience played out nationwide, with states failing to spend tens of millions of federal dollars aimed at helping renters avoid eviction. Burdensome requirements, poorly administered programs and landlords refusing to co-operate meant tens of thousands of tenants never got assistance. Some states also shifted funding away from rental relief, fearing they’d miss a year-end mandate to spend the money - a deadline that got extended.
The problem, housing advocates said, was that the federal government didn’t specifically earmark any of the coronavirus aid for rental relief, leaving states scrambling to set up programs with no guidance on how the money should be allocated. As much as $3.43 billion in federal aid was spent on rental assistance, according to National Low Income Housing Coalition. But advocates said more should have been done, given tenants faced as much as $34 billion in unpaid rent through January, according to a report released by the National Council of State Housing Agencies.
States’ rental relief programs “were a very mixed success. It was sort of a patchwork of programs,” Maryland Democratic Sen. Chris Van Hollen said in February. “There was a lot of experimentation - some successful, some not.”
Several states have since made changes, hoping to be better positioned to handle their portion of more than $45 billion in rental assistance coming from Congress in the coming months.
Last year, Pennsylvania, Louisiana, Mississippi and Kansas were among the states that struggled to distribute rental assistance. Kansas set aside $35 million but siphoned off $15 million for other uses, realizing only on Dec. 27 that it had more time to spend the money.
Mississippi allocated $18 million for rental relief but committed less than $3 million by December. The state said the US Department of Housing and Urban Development determined the grant program it relied on could not help tenants behind on rent, only those at risk of homelessness. A HUD spokesman denied that, saying the money could be used for rental aid.
In New York, difficulties were blamed on lawmakers’ criteria, including that tenants show they were paying over 30% of their income toward rent. Applicants also had to show a loss of income from April to the end of July, when some saw an increase from extended unemployment and other benefits.
“When you have $100 million to help and only 40% is spent, something is wrong. There is no question there are a lot of people in need,” Justin La Mort, a supervising attorney at Mobilization for Justice Inc., a non-profit legal services provider in New York.
He said the program was too focused on preventing fraud - at the expense of helping people.
Bonney Ginett, whose massage therapy business dried up during the pandemic, applied for help in July and said she was denied in October because she failed to prove loss of income. The 66-year-old New York City resident now owes more than $26,000 in back rent on her one-bedroom apartment and fears eviction. “It’s a well-meaning program and probably should and ought to be fixed, but it’s hard to say because of how much overload their system experienced and might still be experiencing,” Ginett said. “The types of relief that could help me are supposedly there. But then you run into a brick wall.”
Lennard Katz, her landlord and a partner at Sussex Realty, said he didn’t understand how Ginett couldn’t get help.
“We believe it’s a travesty that NY State has been unable or unwilling to get money to the tenants and landlords that desperately need assistance during the Covid crisis,” he said by email.
Charni Sochet, a spokesperson for New York State Homes and Community Renewal, said the affordable housing agency “worked intensely for months to ensure rent-burdened households received the assistance for which they qualified” and that “the rent relief program quickly delivered funding to renters most in need in accordance with the specific requirements established by the Legislature.”
Pennsylvania had similar problems, spending $54 million on rental assistance and $10 million on mortgage assistance, out of nearly $175 million dedicated for the program. Just over one-third of applicants got help.
Facing the Republican-controlled Legislature’s Nov. 30 deadline to spend the money, the state Housing Finance Authority returned the bulk of it. Some of it went to the corrections department.
“There were a lot of sort of roadblocks put up for people to really effectively and easily get into the program, get the assistance and stay in their homes,” said Bryce Maretzki, director of the housing authority’s Office of Strategic Planning & Policy.
Perhaps the biggest problem was a $750 monthly cap. That’s below the median rent in Pennsylvania, making it inadequate in bigger cities with higher housing prices.
Applicants also had to be 30 days behind on rent, which Maretzki said meant someone might fall behind to qualify, only to “run the risk of losing your house and then not qualifying for the program.”
“There were many tenants who didn’t think the money would come in time, so they moved in with a family or doubled up or found less suitable housing because they didn’t think they could make the next month’s rent,” said Rachel Garland, an attorney at Community Legal Services in Philadelphia.
In Louisiana, $24 million in assistance for renters facing pandemic-related financial problems was announced July 16, with about half coming from federal funding.
Just $2.3 million has been distributed to 956 applicants, said Keith Cunningham of the Louisiana Housing Corporation, the agency administering the effort. The program was so swamped with inquiries, the online system shut down within days. And there was a lengthy application.
“Do you think the person who is reaching out to you has a fax machine or solid enough internet or a printer in their house to handle a 50-page application?” said Andreanecia Morris of the Greater New Orleans Housing Alliance.
Cunningham said the program’s size was daunting, made more challenging by a busy tropical storm season. “No-one in the state has done anything on that scope,” he said. “There was no infrastructure, no system to deliver. ... We had to really build it from scratch.”
Yaeko Scott, who lost her housekeeping job during the pandemic and owes $6,000 in rent on her family’s two-bedroom apartment in New Orleans, said she’s repeatedly tried to get help. “I’m aggravated,” she said. “Nothing is being done. Everyone is calling asking about the rent. I’m not getting anything. It’s really, really rough right now.”
Some states have made changes with new federal aid coming.
In Louisiana, roughly 7,000 applicants who were initially considered will get priority for $161 million, Cunningham said.
Pennsylvania fixed its $750 rental cap by reinterpreting the law and said a different agency would handle the new funding.
New York expanded the program’s eligibility and will reconsider applicants who were initially denied.
The Biden administration announced yesterday that it will extend the CDC’s federal moratorium on evictions of renters who owe back rent through the end of June. The moratorium had been set to expire on Wednesday, having been put in place under the Trump Administration. It had been criticized by both tenant advocacy groups, who argued it left too many loopholes, and landlord advocates, who argued it restricted the freedom of property owners.
Holden Lewis (pictured), home and mortgage expert at NerdWallet, believes that in our current stage of recovery, an extension of the moratorium was necessary.
“There’s so much back rent owed,” Lewis said. “I’ve read that just in January, there was almost $60 billion in back rent. We have had $52 billion of rent assistance under both administrations, that is due to be handed out. The bottom line is there is still more back rent owed than there is assistance. This problem is going to continue for a few more months until people get back on their feet.”
Lewis explained that the Biden administration was widely expected to make this move, and only left it to the last minute because of the sheer volume of other tasks it is facing at the moment. He also noted that we can expect the moratorium to be lifted when a confluence of factors drive more stability for renters.
While vaccination numbers have exceeded expectations, we’re not out of the pandemic yet. Employment data remains below pre-pandemic levels, despite some improvements, and job losses remain concentrated among lower wage earners and service industry workers, who largely rent.
Even if President Biden hopes for an effective end to the pandemic in America by July 04, it’s somewhat unlikely that we will not still be in some form of economic recovery well past that date. It’s likely, then, that the moratorium isn’t going anywhere anytime soon.
While that news might be a relief for renters, the outlook for landlords is somewhat bleaker. Lewis noted that many landlords across the country are facing a tight squeeze as expenses and carrying costs mount up, while many tenants are still unable to pay their rents. Those struggles are then passed on to the mortgage servicing industry, Lewis noted, which has to bear unpaid mortgage bills because of a dearth in rent payments. It’s an unhappy picture that’s persisted for a long time and while renters have shown they’ll go to extreme lengths to pay their bills, the sheer volume of unpaid rent is a massive hurdle to overcome.
Lewis sees a solution in the form of rental relief programs. While he expects the process will be messy and convoluted, billions of dollars in government spending ought to dislodge some of the stuck bubbles of unpaid rent. If the federal government can shoulder the primary burden as renters get back on their feet, then mortgage professionals can step in and help landlords pay back-bills through balloon payment programs.
If these relief payments don’t come and the countless Americans owing back rent are evicted, they could be swept up in a rapidly accelerating affordability crisis. Lewis believes that this could be “disastrous” for millions of Americans suddenly evicted from their homes and unable to afford rent. Nevertheless, Lewis takes hope in the federal government’s apparent unwillingness to let this happen.
“I have hope because I’m just a classic believer in throwing money at the problem after a disaster,” Lewis said. “I realize a lot of people disagree with that, but when you have a disaster of this magnitude, it’s just fine to throw money at it and worry less about the effect later.”