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FHFA, FHA Extends Foreclosure, Eviction Moratoriums

Foreclosure and eviction moratoriums backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) have been extended to June 30. 

Deadlines for all foreclosure and eviction moratoriums were set to expire on Sunday. 

“During this national health emergency, no one should be forced from their home," said FHFA Director Dr. Mark A. Calabria. “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families.”

The FHA announced that it would halt all new foreclosure actions and suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties. Also, the Administration will cease all evictions of persons from FHA-insured Single Family properties, excluding actions to evict occupants of legally vacant or abandoned properties.

“We made it clear at the beginning of this pandemic that no American should have to worry about losing their home amidst a crisis. Today’s announcement ensures that commitment,” said U.S. Department of Housing and Urban Development (HUD) Secretary Dr. Benjamin Carson. “While we have made great strides in fighting this virus, the fact remains that many Americans are still struggling as we work diligently to get our economy back on sound footing, which I have full confidence we will do through the leadership of the President.”

HUD Deputy Secretary Brian Montgomery said for the more than 8.1 million single-family homeowners with FHA-insured mortgages who need assistance, “our highest priority is to ensure that they have the time through the foreclosure moratorium, and the assistance they need” to remain in their homes. 

“At the same time, extending our policy flexibilities will ensure that affordable FHA-insured mortgage financing continues to remain available to support first-time and other homebuyers, and the Nation’s housing market,” Montgomery said. 

This comes just 24 hours after the FHFA said the GSEs debuted new payment deferral options for borrowers, saying for those who are able to return to making their monthly payment, they now have the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity. 

Servicers will begin offering deferral payment options beginning July 1, 2020. 

The FHFA and the GSEs, in response to COVID-19, allowed borrowers facing financial hardship to go into mortgage forbearance programs—a pause or reduction in their monthly payments. 

As of May 7, nearly 4.1 million homeowners are in forbearance plans, representing 7.7% of all active mortgages, according to the latest forbearance data from Black Knight.

They account for $890 billion in unpaid principal and include 6.4% of all GSE-backed loans and 11% of all FHA/VA loans. At today’s level, mortgage servicers need to advance a combined $4.5 billion/month to holders of government-backed mortgage securities on COVID-19-related forbearances. Another $2.1 billion in lost funds will be faced each month by those with portfolio-held or privately securitized mortgages (some 7.2% of these loans are in forbearance as well).

However, on Wednesday, Democratic Presidential candidate Joe Biden said during an interview that there should be mortgage and rent forgiveness—across the board—during the COVID-19 pandemic, according to multiple reports. 

“There should be rent forgiveness and there should be mortgage forgiveness now in the middle of this crisis. Forgiveness. Not paid later, forgiveness,” he said, according to a Vanity Fair transcript of an interview the former Vice President gave on Good Luck America, Snapchat’s daily political show. “It’s critically important to people who are in the lower-income strata.”

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.

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