CFPB Warns Crisis Puts 11 Million Households At Risk

A couple look at bills with concerned expressions while their kids play in the background

Jose Luis Pelaez Inc / Getty Images

The Consumer Financial Protection Bureau is warning that an estimated 11 million families—nearly 10% of U.S. households—were significantly behind on their mortgage payments or rent at year-end, a bad sign of how many people might lose their homes once federal relief programs end.

More than 2.1 million households were at least three months behind on their mortgage payments at the end of 2020, a 250% increase from 2019, while 8.8 million rental households were behind on rent, the government agency said Monday, issuing its first report on how the COVID-19 pandemic has impacted housing.  

“Put simply: we have very little time to prevent millions of families from losing their homes,” Dave Uejio, the CFPB’s acting director, wrote in a blog post accompanying the report. 

Federal relief programs including temporary foreclosure bans on most mortgages and a moratorium on renter evictions have largely shielded the country from a potential housing crisis. But the freeze on evictions is set to expire March 31, and the foreclosure protections will end three months after that. Plenty of people remain at risk of losing their housing, the CFPB said in its report. 

The CFPB will do all that it can to protect families from this fate, Uejio wrote in his blog post, promising to direct the agency’s policy teams to use any available tools to prevent foreclosures and pledging to make sure families understand their options as the agency continues to track the data. Of particular concern, he said, is that Black and Hispanic families are more than twice as likely to report being behind on housing payments as White families.

More than 18% of renter households reported being behind on their rent in December, the CFPB said, including 27% of households with incomes under $25,000.

The number of homeowners behind on their mortgages has doubled from 3% in March 2020 to 6% in December, but we’ve yet to see the true effect of this increase, between the foreclosure bans and federal programs offering people the option to skip payments by entering into forbearance. In fact, foreclosure rates were at historic lows in 2020, even though the 2.1 million households struggling with their mortgages are estimated to owe nearly $90 billion in deferred housing payents.

“I am deeply concerned that a mass wave of evictions and foreclosures will turn millions of families out on the streets,” Uejio wrote. “Such an event will not only be a humanitarian and public health disaster but will have repercussions throughout the housing sector and our economy at large.”