The Devastating Financial Effects of the Coronavirus

While unemployment claims are at their lowest since March, the unemployment rate has stayed steadily at the highest rates in nearly 40 years. And with the $600 per week supplement gone, far too many Americans have suddenly been thrown into the deep end of poverty.

While many states have extended their eviction bans, people in other states are staring down the barrel of homelessness. New York extended their eviction proceedings until October 1st and Jackson County, Missouri extended their moratorium for at least six months. But California’s stay on evictions and foreclosures expires on September 1st, leaving it to individual counties to decide how to best protect their residents. Alameda County, for example, extended their stay through December 31st.

Sadly, even when eviction protections are in place, many people are still facing aggressive eviction efforts.

While landlords with federally-backed mortgages are protected by temporary relief from mortgage payments, this doesn’t mean they are coming out unscathed. California landlords are calling for an end to the moratorium. If California doesn’t reinstate the stay after September 1st, California is slated to see a record spike in homelessness.

Even with eviction protections in place, all of that back rent is still due, which will leave countless Americans deeper in debt than ever before.

As if unemployment and evictions aren’t enough, there are still wage garnishments to worry about. While the CARES Act was supposed to protect from wage garnishment for failure to make student loan payments, many borrowers report that they are having their wages garnished. A class-action lawsuit has been filed against Betsy DeVos the Secretary of Education.

Whatever happens next one thing is certain, our economy is facing a pandemic of its own.


Sources

FRED Economic Research Unemployment Rate – 20 Yrs. & Over

FHFA FHFA Extends Foreclosure and Eviction Moratorium

Jackson County, MO  Reinstate Eviction Moratorium For At Least 6 Months

Superior Court of Alameda County extends unlawful detainer stay

CA Courts Temporary Emergency Rules on Evictions, Foreclosures Set to End at Midnight Sept. 1 After Judicial Council Vote

The Guardian California landlords are locking out struggling tenants.

Market Watch Borrowers are still having their paychecks seized over defaulted student loans

Consumer Finance Finance Protections for renters

WSJ Renters at Risk: New York Eviction Ban to Expire After Wednesday