WASHINGTON, D.C. - Federal aid programs that were established to help the nation weather the coronavirus, including a moratorium on evictions and a pause on student loan payments, came with expiration dates that are rapidly approaching more than a year after the pandemic first sickened the economy.
Here are some dates when assistance expires:
Eviction moratorium: As a way to curtail spread of the COVID-19 virus, the Centers for Disease Control and Prevention put a moratorium on evictions from rental properties for tenants who couldn’t pay their rent for coronavirus-related reasons. When the moratorium expires on July 31, accumulated rent will be due in full and some will lose their homes.
To prevent an eviction avalanche, the federal government allotted $47 billion in emergency rental assistance in coronavirus relief bills to help beleaguered tenants catch up, but state and local governments have had trouble disseminating the money for use covering their back rent, future rent and utilities.
“The money was held up because they didn’t have the assistance or the capacity to get it out fast enough,” U.S. Housing and Urban Development Secretary Marcia Fudge told the House Financial Services Committee. The former U.S. Congress member from Warrensville Heights said she’s been personally “calling mayors and governors and others” to expedite the flow of money through the system, and that resources reaching communities are “increasing exponentially every month.”
U.S. Sen. Sherrod Brown, an Ohio Democrat who chairs the Senate Committee on Banking, Housing and Urban Affairs, said he discussed the importance of getting rental assistance dollars “out the door” with Treasury Secretary Janet Yellen. He said state and local governments “have got to do better” in disseminating the relief.
“We are working to get tens of billions of dollars out,” said Brown, “Landlords are squeezed on this too, if ... their tenants aren’t paying rent. They’ve got to pay their mortgage still, and got to do upkeep and we’ve got to get the help to the landlord and the tenant together.”
Brown said President Joe Biden can’t act to extend the moratorium because the U.S. Supreme Court ruled it can only be done through congressional action, so “we’re trying to find other ways around it.” Democrats in the House and Senate said they were looking at whether they might be able to quickly pass legislation to extend the moratorium.
A Thursday statement from White House Press Secretary Jen Psaki said Biden would have strongly supported CDC extending the moratorium at a time when the highly contagious Delta variant of the coronavirus could threaten those most likely to face eviction. In addition to calling on Congress to extend the moratorium, she said Biden “has asked the U.S. Departments of Housing and Urban Development, Agriculture, and Veterans Affairs to extend their respective eviction moratoria through the end of September, which will provide continued protection for households living in federally-insured, single-family properties.”
The White House also says that the pace of disseminating Emergency Rental Assistance Program money picked up in June, when eligible households got more than $1.5 billion in assistance.
“In June alone, this assistance served nearly 300,000 households, preventing them from facing eviction proceedings, said Principal Deputy Press Secretary Karine Jean-Pierre. “And these funds that I’m talking about currently -- right now -- can continue to be dispersed to renters and landlords in need until 2025. So, these Emergency Rental Assistance funds do not expire when the moratorium lifts.”
A report from the Urban Institute think tank said many state and local jurisdictions didn’t have rental assistance programs before the pandemic, often because there wasn’t robust federal funding to meet the need. A similar rental relief program from the Great Recession, the Homelessness Prevention and Rapid Re-Housing Program, was considered a quickly implemented program when it obligated $1.5 billion in seven months (PDF) and disbursed those dollars within two years. By comparison, state and local programs have already disbursed $1.49 billion between March and May 2021.
The Urban Institute said that a survey conducted by the U.S. Census Bureau in late May and early June indicated 7 million renters around the country are behind on their rent, and 3 million believe it’s likely that they’ll be evicted when the eviction moratorium expires.
“Millions of renters are in dire need of assistance to stay in their homes, and billions of dollars, an unprecedented amount of funding, is available to meet that need,” the report said. “Ensuring this money reaches people in time is critical to prevent a massive eviction crisis.”
To help tenants find rental assistance, the Treasury Department and National Low Income Housing Coalition have posted lists of local programs throughout the country that are distributing aid. The Consumer Finance Protection Bureau has posted its own assistance tool for renters and landlords.
Marcus Roth, communications director of COHHIO, a statewide housing policy advocacy group, says renters in Cuyahoga County can apply for Emergency Rental Assistance through CHN Housing Partners. Tenants in other Northeast Ohio counties can apply through their local community action agency.
He said that even when it was in full effect, the moratorium didn’t keep tenants from being evicted for other rental agreement violations like property damage, and Ohio courts didn’t always honor renters’ requests for eviction forbearance under the program.
“Some courts we have seen are paying attention to it, other courts are acting like it doesn’t exist,” Roth said. “It is really hard to know how many people are protected by it, but it’s much better than nothing. We are concerned we will see a spike in evictions when it expires.”
Roth said the Census Bureau recently estimated that 213,000 Ohio households are behind on rent and 134,000 are concerned they will be evicted in the next few months.
“Federal relief measures, like Emergency Rental Assistance and the eviction moratorium, were designed to prevent a catastrophic eviction crisis, but we need to think longer term to fix our decades’ old affordable housing shortage so we’re not caught flat-footed again when the next crisis hits,” Roth added. “We’re urging Congress to significantly expand the Housing Choice Voucher program, invest $70 billion to rehabilitate the public housing system, and allocate $45 billion for the National Housing Trust Fund to develop, preserve, and rehabilitate affordable units for extremely low-income Americans.”
Moratorium on foreclosures for federally backed mortgages: A foreclosure moratorium on federally backed mortgages, such as those from Fannie Mae, Freddie Mac, VA, and USDA was also set to expire on July 31. The day before that deadline, the U.S. Departments of Agriculture, Veterans Affairs, Housing and Urban Development, Federal Housing Administration and the Federal Housing Finance Administration announced they’d extend their moratoria until September 30.
The agencies’ heads also released a statement saying that the owners and operators of federally assisted and financed rental housing “should make every effort to access emergency rental assistance resources to avoid evicting a tenant for non-payment of rent.
“Owners and operators of federally-assisted housing are stewards of important public resources and should access rental assistance both to prevent unnecessary human suffering and to protect the public investment in affordable housing,” their statement said
“We must continue to do everything within our authority to make sure that foreclosed borrowers who are impacted by the pandemic have the time and resources to secure safe and stable housing, whether it’s in their current homes, or by obtaining alternative housing options,” added a statement from HUD’s Principal Deputy Assistant Secretary for Housing, Lopa P. Kolluri. “We don’t want to see any individuals or families displaced unnecessarily while trying to recover from the pandemic.”
When foreclosures resume, they will probably start with abandoned homes and mortgages that were already 120 days behind on payments when the moratorium started in March of 2020. Homeowners can work with their mortgage companies or HUD-approved foreclosure avoidance counselors to get help staying in their homes.
In June, the Consumer Financial Protection Bureau established a new rule to help the estimated 1.74 million homeowners around the country whose mortgages are in forbearance to have an opportunity to avoid foreclosure. It goes into effect on Aug. 31 and establishes three main safeguards that loan servicers will have to establish before they can foreclose on borrowers who are more than 120 days behind on payments.
- Borrowers must submit a loss mitigation application to their loan servicer before any foreclosure can start. After the application is reviewed, foreclosures can move forward if borrowers exhaust foreclosure avoidance options and still can’t make their payments.
- Loan servicers must try to reach borrowers before initiating foreclosure. The process can proceed if homeowners are more than four months behind on rent and haven’t responded to inquiries for more than 90 days.
- On abandoned properties, servicers can’t foreclose until they verify that applicable state or local laws consider the property abandoned.
That new rule expires on Jan 1. Brown said it will protect millions of struggling homeowners from foreclosure.
“It’s critical that the CFPB keep a close watch on servicers as they implement this rule – and ensure homeowners know about other assistance available to help them stay in their homes,” said a statement from Brown.
Supplemental Nutrition Assistance Program: A 15 percent increase in benefits for all food stamp recipients runs through Sept. 30. The more than 40 million people around the country who use SNAP may see their benefits go down unless Congress acts.
An analysis from the Robert Wood Johnson Foundation and Urban Institute found that the temporary SNAP benefit boost helped reduce food insecurity and poverty rates over the past year, but meal costs still exceed food assistance benefits in 41 percent of U.S. counties. Before the increase, the maximum SNAP benefit didn’t cover the national average meal cost in 96 percent of counties.
Elaine Waxman, a senior fellow at the Urban Institute, said that 40 percent of households receiving SNAP have zero net income, which puts people in those households “at high risk of experiencing food insecurity” if SNAP doesn’t cover their meal costs.
“Hunger and poverty disproportionately affect children and families of color and those with low incomes,” added a statement from Jamie Bussel of the Robert Wood Johnson Foundation. “SNAP is a crucial lifeline for millions, but this analysis shows we are still not maximizing its full potential,”
Bussel said the temporary increase in SNAP benefits should be made permanent, and additional steps should be taken “to ensure that SNAP benefits cover the cost of a meal for every participant in every county during the pandemic and beyond.”
SNAP is the nation’s largest food assistance program, serving more than 40 million participants each month. Nearly half of all SNAP participants are children. Experts say SNAP has been an important buffer for food insecurity during the pandemic related recession.
Federal student loan payments: When he took office, Biden extended a pause on federal student loan payments until Sept. 30. While the forbearance is in effect, loan payments are suspended, 0% interest is being charged, and collections have stopped on defaulted loans.
Senate Majority Leader Chuck Schumer of New York and Massachusetts Sen. Elizabeth Warren want Biden to extend the pause on student loan payments until at least March 31, 2022 and to permanently cancel up to $50,000 of student loan debt for borrowers.
“The scheduled resumption of student loan payments in October could create a significant drag on our economic recovery,” said a letter they sent with a group of Democrats that include Brown. “Before the pandemic, the average student loan payment was between $200 and $299 per month – a substantial part of a household budget, and money that is desperately needed for basic needs. While our federal student aid system offers several income based repayment plans that allow struggling borrowers to lower their monthly payments, the enrollment process for these options is complex and lengthy, and student loan servicers are concerned that they will be overwhelmed by the number of borrowers who will need to navigate this process in a short period of time after a significant length of time in which they had little to no contact with borrowers.”
When the payment suspension ends, the education department says borrowers will get a billing statement or notice at least 21 days before payments resume. It says 42.9 million people in the United States have federal student loans.
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