By Noah Rothstein
With many homeowners struggling to meet their monthly payments, the White House said that those with certain government-backed mortgages could have their monthly principal and interest payments reduced by 25% in an effort to keep people housed.
In response to the COVID-19 pandemic, the federal government allowed millions of Americans to defer their mortgage and rent payments. This move targeted loans backed by the departments of Housing and Urban Development, Agriculture, or Veterans’ Affairs to bring them in line with mortgages backed by mortgage loan companies Fannie Mae and Freddie Mac.
The White House said in a statement that homeowners who are still “looking for work, re-training, having trouble catching up on back taxes and insurance, or are continuing to experience hardship for another reason” are eligible for the payment reduction.
The Biden administration has taken other steps to protect homeowners, such as extending the eviction moratorium to the end of July.
In an attempt to prevent further foreclosures, the Consumer Financial Protection Bureau (CFPB) finalized new protections for struggling homeowners. However, it did not recommend a blanket ban on evictions.
President Joe Biden has nominated Rohit Chopra to be Director of the CFPB. If confirmed, his priorities would include ensuring accurate credit reports and helping consumers behind on rent or mortgage payments.
“We must not forget that the financial lives of millions of Americans lay in ruin,” Mr. Chopra said to a Senate panel considering his nomination. “Many have seen their jobs disappear and will not be able to easily resume their [rent and mortgage] payments.”
For more information about this policy change, read the entire White House statement here.
