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The Federal Housing Finance Agency extended the foreclosure and REO eviction moratoriums for enterprise-backed mortgages earlier this week. While the FHFA's move will help to keep families in their homes as the country still battles the COVID-19 pandemic's domino effect on the economy, Richard Kruse, the president of Gryphon USA, Ltd. and leading auctioneer of foreclosure property believes it could be delaying the inevitable.
"The underlying problem is still there and the extension does not provide any solution," said Kruse, according to a press release.
The new FHFA foreclosure moratorium extension for GSEs has been extended to Jan. 31, 2021 and according to take Kruse, the moratorium only postpones the negative impact the foreclosures will cause as unpaid bills lead to higher levels of default, according to the release.
"Continuing with the moratoriums indefinitely," Kruse said, "will significantly disrupt future economic performances as home payoff and credit card balances grow, leading to more debt issues and bankruptcy increases."
"Policymakers will have to contend with the fallout of the moratorium even as the next natural wave of defaulting loans forms. The prospect of COVID-19 vaccines could clarify when the moratorium will end allowing tenants and property owners to begin plans for the next step."