The push for a moratorium on foreclosures and evictions in the United States has roots in the economic fallout from events like the COVID-19 pandemic, where various protective measures were implemented to prevent housing instability. However, the claim that foreclosure and eviction processes constitute a “money laundering scheme” lacks substantiation from credible sources and appears to be an oversimplification or misrepresentation of complex legal and financial processes.
Historically, during crises, moratoriums on foreclosures and evictions have been enacted to provide relief to homeowners and renters facing financial hardship. For instance:
- Federal Housing Administration (FHA): Implemented moratoriums on new and ongoing foreclosures for FHA-insured single-family loans, with specific extensions noted through September 30, 2021. However, this did not apply to vacant or abandoned properties.
- Veterans Affairs (VA): Extended foreclosure suspensions for VA-guaranteed mortgages through July 31, 2021, excluding properties identified as vacant or abandoned.
- U.S. Department of Agriculture (USDA): Announced moratoriums on USDA Single Family Housing Direct and Guaranteed loans, extending protections through June 30, 2021, under similar conditions.
- Federal Housing Finance Agency (FHFA): Extended moratoriums on foreclosures and evictions for properties backed by Fannie Mae and Freddie Mac until July 31, 2021.
These actions were part of broader efforts to stabilize housing markets and support those affected by economic disruptions. However, they are temporary measures, and the end of such moratoriums could lead to increased foreclosure and eviction rates if not accompanied by continued economic recovery or further legislative support.
Regarding the accusation of these processes being a “money laundering scheme,” there’s no direct evidence or widespread acknowledgment in credible sources to support this assertion. Foreclosures and evictions are legal processes regulated by state and federal laws, aimed at resolving defaults on loans or rental agreements, not inherently linked to money laundering. Money laundering typically involves complex schemes to hide the origins of illegally obtained money, which does not align with the primary functions of foreclosure and eviction processes.
If you or someone you know is facing foreclosure or eviction and believes they are part of a larger, unethical scheme, it’s advisable to seek legal counsel to understand your rights and explore available protections. Additionally, engaging with local housing authorities or advocacy groups can provide further guidance and support.