CFPB warns lenders of “tidal wave” of distressed mortgages
Share Now on:
As the economy recovers, businesses reopen and people return to work, pandemic economic relief programs will be winding down, including mortgage forbearance programs.
As of January, more than 2.7 million people were still in the programs to put payments on hold during the pandemic, according to the Consumer Financial Protection Bureau.
The CFPB is warning mortgage servicers to get ready for what it calls a “tidal wave of distressed homeowners” when forbearance starts to expire in June.
Meg Burns with the Housing Policy Council, an industry group, said homeowners are in better shape than they were in the last economic crisis.
“They have more equity in their properties, they are receiving assistance very quickly,” she said. “And I think that we expect to see fewer foreclosures as a result of it.”
Also, the programs to help people who miss payments are better this time around, said Mike Calhoun, who runs the Center for Responsible Lending.
“The good news is that those payments are generally added simply to the end of the loan with no additional fees or interest.”
Calhoun said this CFPB guidance also signals that the agency will take a more active role in consumer protection moving forward.
COVID-19 Economy FAQs
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
Give me a snapshot of the labor market in the U.S.
U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?