The CFPB Turns An Eye Toward the Multifamily Sector

A new report from the Consumer Finance Protection Bureau shows the agency is monitoring the plight of struggling renters and the multifamily rental marketplace. But the question is, according to a recent analysis from Trepp that was written by Mike Flood of the Mortgage Bankers Association, how far does the CFPB’s jurisdiction extend/? 

The CFPB may well try to stretch its mandate—much like the Centers for Disease Control and Prevention did with its eviction moratorium—and the recent report makes clear it sees renters as consumers, many of whom are in need of protection. In particular, the report covers the multifamily market, eviction moratoria, and the ability of renters to make monthly payments.

“The CFPB was created in the aftermath of the 2007-08 housing crisis, and Congress uniquely equipped us to address the current looming housing crisis,” CFPB Director Dave Ueijo said in a recent blog post.  Where we can use our authority to keep people in their homes, we will.”

Ueijo notes he’s instructed his teams to “consider all of the CFPB’s available tools to preserve people’s homes and protect them from unnecessary foreclosure.” He notes the bureau is working closely with federal agencies including the US Departments of Housing and Urban Development, Agriculture, and Veterans Affairs, as well as the Federal Housing Finance Agency, to that end.

“We want families to keep their homes where that makes sense and, where it doesn’t, that families have a chance to explore other options that let them preserve as much of their investment as possible,” Ueijo said. “Where, unfortunately, families are no longer able to maintain homeownership, I’m directing our teams to work toward an orderly, humane, and equitable outcome for families. No family should be forced through foreclosure without a chance to explore options, including the opportunity to sell their home for fair market value.”

The bureau also expressed a commitment to ensuring homeowners and renters have the tools they need to understand their rights and protections, to stay on alert for scams, and to help them request forbearance or mortgage relief if applicable.

“We know that many people haven’t requested the relief for which they may be eligible,” he wrote. “For example, roughly 263,000 families are at least 90 days behind on their mortgage and not in forbearance. The CFPB will engage with homeowners to help them know they have options, including sharing information with our most vulnerable consumers and communities. We will continue to share updates as we expand our work in this area.”

Finally, the bureau doubled down on its commitment to understanding the causes and cures of housing insecurity, which it deemed a crisis. That means allocating research capabilities to track delinquencies, foreclosures, and evictions and to analyze complaint data from other sources, like mortgage servicers, to better understand the current housing picture. 

“We need to know more about homeowners and communities to help them overcome the inevitable financial impacts of a crisis of this magnitude,” he said. “While there are significant differences compared to the last mortgage crisis, including a more stable mortgage market and substantial homeowner equity, we need to know more. We don’t know if the most vulnerable communities, hit the hardest by COVID-19 and its financial impacts, have sufficient equity to buffer them from the consequences of extended forbearances and job loss…We are committed to using all of our authorities to address the risks posed by this historic level of housing insecurity while there is still time to avoid full-on catastrophe.”