June 29, 2020

Van Hollen, Menendez, Brown Introduce Bill to Support Homeowners, Renters Struggling Amid COVID-19 Pandemic and Economic Fallout

Housing crisis looms as millions fear foreclosure, eviction, homelessness

Today, U.S. Senators Chris Van Hollen (D-Md.), Bob Menendez (D-N.J.), and Sherrod Brown (D-Ohio) introduced the Coronavirus Housing Counseling Improvement Act to expand access to critical information, assistance programs and services for millions of families struggling to remain in their homes because of the COVID-19 pandemic and economic fallout. 

“Millions of Americans continue to face financial hardship as a result of the COVID-19 pandemic,” said Sen. Van Hollen. “The Congress must do everything in its power to not only extend financial relief, but also to give families the information they need to access these relief options and keep a roof over their head. This legislation provides Americans with crucial resources to stay in their homes – especially those in communities of color who have been hit hardest – so that they can weather the COVID-19 storm.”

“Millions of families across our country – already suffering through job and income loss -- are now living in fear that in a matter of weeks or months, they will be facing down foreclosure, eviction and even homelessness,” said Sen. Menendez. “Knowledge is power. Along with fighting for more federal assistance and protections – we’ve got to expand access to housing counseling so that these individuals and families can get help in finding affordable ways to stay in their homes.”

“Losing a home to foreclosure or eviction turns a family’s life upside down,” said Sen. Brown. “During a pandemic, it also puts their health at risk. Providing vital funding to housing counselors will ensure that homeowners and renters – especially Black and brown homeowners and renters who have been hardest hit by this pandemic – have the tools and support they need to navigate our nation’s complex housing system.” 

The bill is co-sponsored by Senators Kyrsten Sinema (D-Ariz.),Tina Smith (D-Minn.), Cory Booker (D.N.J.), Elizabeth Warren (D-Mass.), Jacky Rosen (D-Nev.), Bernie Sanders (I-Vt.), Amy Klobuchar (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Chris Coons (D-Del.), Dianne Feinstein (D-Calif.), Mazie Hirono (D-Hawaii), Jon Tester (D-Mont.), Catherine Cortez Masto (D-Nev.) and Mark Warner (D-Va.).

According to the Mortgage Bankers Association, more than 4.2 million homeowners have entered foreclosure prevention plans since the end of March. 

Low-income and minority households have been disproportionately impacted by the pandemic and economic fallout. According to a Census Household Survey taken between June 4 and June 9, 12.43% of Hispanic households and 12.74% of Black households were not able to pay their mortgage, compared to 5.71% of white households. Additionally, 23.27% of Hispanic households and 25.77% of Black households were unable to pay their rent, compared to 11.78% of white households.

HUD-approved housing counseling agencies provide individual counseling and education services to help consumers avoid foreclosure and eviction, purchase homes, secure affordable rental housing and develop sustainable budgets. They can be especially important during an economic crisis. According to a 2018 report from NeighborWorks America, households that utilized the National Foreclosure Mitigation Counseling Program through a housing counseling agency during the Great Recession were three times more likely to receive loan modifications and less likely to go into foreclosure or re-default on their home loans compared to those who did not.

“We are surging into homeowner and renter crises with record unemployment and unpredictable COVID-19 infection rates,” said Bruce Dorpalen, Executive Director for the National Housing Resource Center. “As we saw in the foreclosure crisis, working with a housing counselor can make the difference on who can stay in their home. This bill provides the funding and support to double the capacity of housing counseling agencies to work with housing consumers and find the most sustainable solutions for America's stressed households.”

The Coronavirus Housing Counseling Act would:

Provide $700 million for NeighborWorks to support housing counseling services to help homeowners, renters, people experiencing homelessness, and people at risk of homelessness navigate their housing options and rights during the COVID-19 crisis, including protections and resources provided through COVID-19 relief legislation.

  • Requires that no less than 40 percent of the $700 million fund is targeted to counseling organizations that serve minority and low-income homeowners and renters. 
  • The CARES Act included housing provisions to help homeowners and renters financially affected by the COVID-19 pandemic. Homeowners with Federal Housing Administration, U.S. Department of Agriculture or Veterans Affairs mortgages and those with mortgages backed by Fannie Mae or Freddie Mac can request forbearance on their payments for up to six months, with a possible extension for another six months without fees, penalties, or extra interest.