The following is an excerpt from an article published by DSNews on December 17, 2020.
Despite federal and local efforts to halt foreclosures and evictions during a global health crisis, losing a home has become a real threat facing millions of Americans, especially as preventative moratoria expire in December and January.
“If the federal government and the CDC allow the mortarium to lapse in the new year I think we are in for the most terrifying segment of the pandemic experience and that we will see any effort to mitigate the spread of COVID-19 fail, setting us up for decades if not generations of recovery due to the devastating outcome of such widespread eviction,” says Emily Benfer, a Wake Forest professor.
To suggest how many evictions and foreclosures could occur if the protections lapsed, Benfer pointed out that “when CARES Act protection lapsed for two weeks earlier this year, evictions spiked as high as 395% above historic levels.”
Even extensions of foreclosure moratoria, more stimulus, and increased crisis-related unemployment benefits would not necessarily stave off pending problems, according to Business Insider‘s Taylor Borden, who wrote, “Experts have said that even if moratoriums are extended and unemployment benefits continue, that could simply be kicking the can down the road, delaying a wave of homelessness.”
“2020 has been a challenge for all, with a large percentage of consumers struggling to pay their bills. Banks and financial service providers play a critical role in helping their customers navigate these uncertain times.”
–Michael Magaard, VP, Customer Communication Services at FICO.
A separate report by FICO showed almost a quarter of study participants said they were not at all or not very confident about their finances remaining stable in the next three months. In fact, 42% of consumers said they had to contact one of their financial services providers to help manage repayment of existing credit commitments since the start of COVID-19. The FICO study concludes that working with a lender is the best way to avoid the eventual loss of property.