It’s only fair the foreclosure process is shut down while the federal government remains on a partial shutdown, housing advocates urged.
Fifteen organizations from across the country urged the U.S. Department of Agriculture (USDA) in a letter to pause all foreclosure proceedings during the shutdown for its home loans where borrowers are behind.
Though better known as the federal agency that sets farming policies and inspects the nation’s food, the USDA also runs a home loan program focusing on rural homeownership. When borrowers fall behind, the program allows for alternatives to foreclosure. But a servicing center that’s key to helping struggling homeowners has stopped operating while the shutdown grinds on, the letter noted.
“Without access to the process, homeowners will face avoidable foreclosures,” said the letter submitted on the shutdown’s 27th day. The housing advocates insisted a “comprehensive stay” is justified.
The advocates noted the USDA hasn’t publicly said what its current stance is on foreclosure activities — so there’s “no reason to believe that foreclosure filings, motions, and sales have completely stopped at this time.”
The USDA did not immediately respond to a request for comment. Numbers on USDA-issued loans in foreclosure were not immediately available.
Geoffry Walsh, a staff attorney at the National Consumer Law Center, said there were about one million participants in the USDA’s direct home loan program, and another million in its insured loan program.
Some rural homeowners are still seeing foreclosure cases unfold, Walsh said, including one instance where a house sale in the South is still slated for next month. “Nobody told them not to do it,” Walsh told MarketWatch.
A similar servicing centre at the Federal Housing Administration is also shut down, Walsh said.
The federal funding impasse is rooted in President Donald Trump’s demand for a wall along the Mexican border. More ripple effects are accumulating as the now record-setting shutdown wears on.
The White House is saying the shutdown would shave first quarter domestic product by .5 percentage points if the halt goes through the month. Meanwhile, furloughed federal workers are trying to figure out ways to make ends meet — one contractor has resorted to making Star Wars models.
Unpaid federal workers are also getting pinched on their housing costs. Zillow estimates the roughly 380,000 furloughed employees and 420,000 people working without pay could owe about $438 million in mortgage and rent payments this month.
Source: marketwatch.comFollow Us on Social Media