Hours after President Trump announced a suspension of foreclosures and evictions for mortgages backed by the U.S. Department of Housing and Urban Development [1] (HUD) and the Federal Housing Finance Agency [2] (FHFA), official statements from FHFA and HUD clarified that the policy will extend at least 60 days. This is contrary to earlier reporting that pegged the window for these suspensions as extending “until the end of April.”
During an earlier press conference Wednesday, President Trump had said, “Today I am also announcing that the Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April. We are working very closely with Dr. Ben Carson and everybody from HUD.”
“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” said HUD Secretary Dr. Benjamin Carson. “The health and safety of the American people is of the utmost importance to the Department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”
“This is an uncertain time for many Americans, particularly those who could experience a loss of income. As such, we want to provide FHA borrower households with some immediate relief given the current circumstances,” said Federal Housing Commissioner The Hon. Brian Montgomery. “Our actions today make it clear where the priority needs to be.”
“This foreclosure and eviction suspension allows homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency," said FHFA Director Mark Calabria. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible. The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance."
Consumer Financial Protection Bureau Director Kathy Kraninger also released a statement [3]:
The actions taken today by HUD and FHFA are timely and an important step in providing assurance to consumers. I commend my colleagues at HUD and FHFA for being proactive on this issue and providing Americans with much needed peace of mind during this uncertain time.
Earlier this month, the Bureau, along with our Federal and State partners, encouraged financial institutions to work with their customers affected by the coronavirus. Consumers’ first stop in the face of hardship is with their creditors and their financial institutions, so our message was important for regulated entities to hear. I will continue to work with our Federal and State partners, and seek feedback from stakeholders, to ensure we are providing appropriate flexibilities to benefit consumers during this time.
For consumers, the Bureau continues our work to protect them in the financial marketplace. We have released resources for consumers to understand issues that may arise as a result of COVID-19, including information on how to protect their finances and how to submit complaints. Our team is ready to help consumers resolve issues with their financial services providers who submit a complaint through our consumer complaint system.
This development follows upon the FHFA’s announcement earlier this month that the GSEs would provide payment forbearance to borrowers impacted by the coronavirus. This forbearance would permit a mortgage payment to be suspended for up to 12 months due to hardship considerations..
Many cities and states had already announced moratoriums on evictions—including the cities of Seattle, Los Angeles, and Boston and states like New York and Massachusetts.
“Imagine if you’re in a situation where you just lost your job because of something out of your control, and you can’t pay your rent,” said San Francisco Mayor London Breed, who on Friday signed an executive order putting a moratorium on evictions for 30 days. “We want to take that stress away from people who might feel that way.”
Italy, who’s total number of Coronavirus cases has risen to 31,506, has also put a moratorium on foreclosures for its citizens.
“The steps made by FHFA and HUD today are important to address the concerns that many Americans have regarding the far-reaching economic impact that COVID-19 will have,” said Ed Delgado, President and CEO of Five Star Global. “Mortgage servicers are at the ready to work with HUD and homeowners to make sure any homeowner questions on this moratorium are addressed quickly and adequately.”
In an interview with American Banker [4] earlier this week, Delgado had also addressed the potential strain mortgage servicers will face during the COVID-19 pandemic, including challenges such as fully staffing call centers.
“Can they have every other cubicle occupied, so that you’re at least six feet apart from your co-worker?” Delgado asked.
The new FHFA and HUD policy comes on the same day several agencies [5] reported that the Department of the Treasury is looking to send $500 billion in checks to Americans in response to the ongoing COVID-19 pandemic and the related economic shockwaves.
Reports say checks will be sent in two $250 billion phases—first on April 6 and then on May 18.
The Associated Press is reporting this plan is the centerpiece of a $1 trillion economic stimulus, and that the amount of the checks may depend on income and family size.
The Associated Press states the Treasury’s plan would require approval by Congress and recommends $50 billion to stabilize the airline industry, $150 billion to issue loan guarantees to “other struggling sectors,” and $300 billion for small businesses.
Politico reports [6]the Senate is also expected to pass a multi-billion emergency aid package on Wednesday.