The Consumer Financial Protection Bureau is planning on banning foreclosures until 2022.
According to the bureau, 3 million households are behind on their mortgage payments and almost 1.7 million will run out of their forbearance periods in September.
“We are at really an unusual point in history,” Diane Thompson, a senior adviser at the bureau said. “I don’t think anybody has ever before seen this many mortgages in forbearance at one time that are expected to exit at one time.”
The agency’s proposal would prevent servicers from starting foreclosure proceedings until Dec. 31. That would give borrowers coming off of their forbearance time to weigh options like whether they may need to modify their mortgage.
The agency is also looking to implement a rule that would allow servicers to extend loan modification offers to borrowers suffering from the COVID-19 pandemic.