President Trump on Wednesday directed the Department of Housing and Urban Development (HUD) to suspend evictions and foreclosures through April as Americans grapple with the fallout of the coronavirus.
“The Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April,” Trump said at a White House press briefing. “So we’re working very closely with [HUD Secretary] Dr. Ben Carson and everybody from HUD.”
The moratorium will apply only to homeowners with mortgages insured by the Federal Housing Administration, a HUD agency that backs affordable home loans issued through private firms.
“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” Carson said in a statement, referring to the disease caused by the novel coronavirus.
“The health and safety of the American people is of the utmost importance to the Department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”
The Federal Housing Finance Agency (FHFA) also announced Wednesday that it would suspend foreclosures and evictions for homeowners with mortgages backed by Fannie Mae or Freddie Mac.
Fannie and Freddie are government-sponsored enterprises that purchase mortgages furnished to low-income homeowners and either hold the loans in their portfolios or package them into investment products. The sale of mortgage-backed securities gives banks and mortgage lenders a steady stream of return on home loans that allows them to keep issuing affordable mortgages to low-income homeowners.
The move offers a reprieve for many Americans as the economy reels from impacts of the coronavirus. Some state and local leaders have already suspended evictions during the pandemic, citing the financial uncertainty many renters and homeowners are facing.
Efforts to mitigate COVID-19, the disease caused by the novel coronavirus, have forced restaurants, bars, retailers, entertainment venues and workplaces across the country to close for weeks or possibly months.
Treasury Secretary Steven Mnuchin had reportedly told Senate Republicans on Tuesday that unemployment could surge to 20 percent in a worst-case scenario, but both he and Trump on Wednesday tried to tamp down fears of a spike in joblessness that high.
“I don’t agree with that,” Trump said during a Wednesday press conference. “That’s an absolute total, worst-case scenario.”
The sudden shutdown of entire industries has already prompted a surge of applications for unemployment insurance and may leave millions of Americans struggling to pay rent or their mortgages.
The White House and Congress are negotiating over an economic rescue package to support laid-off workers and shuttered businesses, including direct cash payments to Americans, but have faced resistance from some Senate Republicans.
Updated at 2:46 p.m.