President Trump announced that the Department of Housing and Urban Development (HUD) will temporarily put a halt to foreclosures and evictions during a daily briefing at the White House Wednesday.
At this time, the suspension will last through the end of April.
“We’re working very closely with Dr. Ben Carson and everybody from HUD,” Trump said during the briefing.
Following the announcement, the Federal Housing Finance Agency (FHFA) said it would direct Fannie Mae and Freddie Mac to stop foreclosures and evictions as well for at least 60 days.
Previously, members of Congress and activists had urged the Trump administration to enact such measures as the spread of coronavirus deepens in the U.S. On Tuesday, 106 House Democrats wrote a letter to various agencies imploring for a foreclosure and eviction freeze on properties backed by Fannie Mae, Freddie Mac, HUD, the Department of Veterans Affairs, and the Department of Agriculture’s Rural Housing Service.
Markets continued to slide amidst the announcement, with the Dow Jones industrial average and the S&P 500 dropping more than 7 percent, triggering a halt in trade.
The suspension of foreclosures “allows homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” Mark Calabria, director of FHFA, said in a statement.
Kathleen Kraninger, director of the Consumer Financial Protection Bureau (CFPB) commended the mandate in a statement.
“The actions taken today by HUD and FHFA are timely and an important step in providing assurance to consumers,” Kraninger said. “I commend my colleagues at HUD and FHFA for being proactive on this issue and providing Americans with much needed peace of mind during this uncertain time.”
Experts in finance and law also applauded the relief move by the government.
“[The directive] postpones foreclosures, which will allow defaulted borrowers to stay in their homes and not further burden the system because of the need to seek alternative housing,” Joseph Lynyak III, an expert on the CFPB, Dodd-Frank and regulatory reform and partner at Dorsey & Whitney LLP, said in an email to Inman.
“It allows those borrowers to remain in place and not be forced to engage in unnecessary contact with other members of the public,” Lynyak added. “Finally, it also protects loan servicing and foreclosure personnel whom by this action can refrain from unnecessary contact in the community. The economic loss of a delay of this nature is minimal when compared with the effect this measure may have on the national effort to minimize transmitting the virus.”