The Vice President of the United States Mike Pence addressed business and mortgage leaders during a conference call on Thursday, discussing the federal government’s response to COVID-19.
The call was hosted by Dr. Benjamin Carson, Secretary for the Department of Housing and Urban Development (HUD) and Brian D. Montgomery, Federal Housing Commissioner, Assistant Secretary of HUD.
Pence told the mortgage and business leaders that “we are making real progress” in slowing the spread of COVID-19, and that social-distancing efforts are helping to flatten the curve.
“As of this morning, I am pleased to report that the numbers on the west coast continue to be low and steady but even in the New York metro area, including New Jersey and Connecticut and of course all of New York City's broader area we believe that we are past the peak,” Pence said.
Pence continued, saying: “Every single day we are one day closer to putting this epidemic in the past and I want to assure you that we are going to continue to use the full weight of the local government to support.”
Secretary Carson said that the FHA took a series of important actions to provide relief to the American people across the country.
HUD enacted foreclosure and eviction moratoriums for 60 days in March and announced in April that homeowners insured through the FHA could either make reduced payments or defer payments, for six months if they were impacted by COVID-19.
Commissioner Montgomery added that the FHA will "obviously evaluate" the length of the policy as needed in the weeks ahead.
He also said that the FHA issued a temporary waiver related to the in-person contact of early-default intervention.
"In accordance with the CARES Act, we swiftly issued a mortgagee letter with loss-mitigation options for single-family borrowers affected by COVID-19. These policies should ease the stress of both borrowers and servicers," Commissioner Montgomery said.
He added that as long as the borrower is on a forbearance plan, the lender or servicer must waive all fees, charges, and penalties. However, Commissioner Montgomery noted that "we strongly encourage" people to continue to pay their mortgages if they are able.
"We need to ensure our resources are directed to those who most need the help," Commissioner Montgomery said.
“I want to thank Vice President Pence, Secretary Carson, and Commissioner Montgomery for recognizing the efforts being made across the mortgage industry towards protecting and preserving homeownership,” Delgado said. “We applaud the efforts of the Administration and the unwavering commitment displayed by HUD to protect homeownership nationwide.”
Secretary Carson recalled his life before HUD, working in medicine, operating on children with problems. He said he has seen firsthand the trauma that comes into people’s lives with a child is sick.
However, he said he has also seen the “incredible resilience of the human spirit.”
“Even when children and families are given a difficult response, those families’ first response is to pull together, to still their spirits to face the future with steady hands and hearts full of faith. That’s the sort of response we’re seeing happen within our American family as we resolve to pull together during this urgency put upon us by COVID-19,” Secretary Carson said.
Secretary Carson added that he has taken those decades of experience in the operating room into the mindset of HUD.
“While housing needs are always in my direct line of sight at HUD, the importance of keeping people healthy and safe has never really left my wider view. At the end of the day, everything comes secondary to a person’s health,” he said.
Commissioner Montgomery added during the call that, “no one should lose their home because of the virus.”
The Commissioner added that for loss mitigation, home retention options are available for single-family borrowers and include senior borrowers with FHA-insured reverse mortgages, known as home-equity conversion mortgages, or HECMs for short, by extending important deadlines.
"To help our seniors affected by COVID-19, the HECM provision includes delays on calling the loans due in payable, such as when a borrower enters a healthcare facility due to COVID-19. This policy also extends timelines and temporarily withdraws requirements for HECM claims to reduce burdens on servicers," Commissioner Montgomery said.
He added that the COVID-19 National Emergency Standalone Partial Claim is designed to be used once a borrower’s COVID-19 forbearance period ends and if they are able to resume their prior payment.
"To ensure this process is smooth for borrowers and servicers, we are developing a new portal to receive and process the standalone partial claims within FHA’s new cloud platform known as FHA Catalyst, which is our fortuitously timed aggressive effort to modernize our IT infrastructure. We expect this functionality to be ready by June, right about the time we should start seeing the first COVID-19 partial claims," Commissioner Montgomery said.
For borrowers who do not qualify for the COVID-19 Standalone Partial Claim at the end of their forbearance period, vendors are required to evaluate them for other loss-mitigation options.
Secretary Carson said the HUD received $1 million in COVID-19-related funding to support the Fair Housing Initiative Program, mostly for education and outreach initiatives.
He added that funded activities will include a range of national, regional, and local educational and outreach activities to address fair housing issues related to the coronavirus. Secretary also said that HUD’s Office of Fair Housing and Equal Opportunity is currently drafting a notice of funding available to make these funds available competitively, on an expedited basis.
Additionally, Secretary Carson said funds being made available through the CARES Act provide an additional $5 billion for the Community Development Block Grant program.
"The CARES Act is also providing unprecedented and immediate relief to American families, workers, and businesses that support a variety of programs," Secretary Carson said.
The CARES Act also designated $1.25 billion for a tenant-based rental assistant, $1 billion for Section 8 project-based rental assistance, $200 million for Indian Housing block grant program, $100 million for Indian Community Development block grants, $65 million for housing persons with AIDS, $50 million for housing the elderly, and $15 million for housing persons with disabilities.
Earlier this week, Five Star Global’s President and CEO Ed Delgado spoke with Commissioner Montgomery for a candid discussion about the industry’s reaction to COVID-19. Listen to that full podcast conversation here.