Moratoriums on Federal Housing Administration’s (FHA) foreclosure and eviction are extended to June 30, along with mortgage forbearance, the U.S. Department of Housing and Urban Development (HUD) announced last week.
Forbearance is an option mortgage servicers use to provide homeowners with a pause to their monthly payments for a limited period of time during a COVID-19 induced hardship.
These measures will provide relief to the nation’s homeowners with FHA-insured single-family mortgages who continue to suffer financially because of the COVID-19 pandemic, HUD announced.
Additionally, the Office of Public and Indian Housing is planning to announce similar relief for Native American and Native Hawaiian homeowners assisted under the Section 184 Indian Home Loan Guarantee Program and the Section 184A Native Hawaiian Housing Loan Guarantee Program.
“As President Biden has made clear, it is urgent that we help homeowners throughout the nation who are struggling financially from this unprecedented national emergency,” said acting HUD Secretary Matthew Ammon. “The steps we are taking today will provide both immediate relief to those in desperate need of assistance and help more homeowners keep their homes and resume their payments when the pandemic subsides.”
The extension of the foreclosure and eviction moratoriums applies to all homeowners with an FHA-insured forward or Home Equity Conversion Mortgage (HECM) loan through June 30.
This also includes homeowners with a Section 184 or Section 184A mortgage loan, except for properties that are legally vacant or abandoned.
The department says it prohibits servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions during the moratoriums.
Today, one in five renters are behind on rent and just over 10 million homeowners are behind on mortgage payments, according to the White House. People of color face even greater hardship and are more likely to have deferred or missed payments, putting them at greater risk of eviction and foreclosure, regulators have noted.
“These critical protections were due to expire in March, leaving many at risk of falling further into debt and losing their homes,” the White House said in a statement. “Now, homeowners will receive urgently needed relief as we face this unprecedented national emergency.”
Last week, the Federal Housing Finance Agency, the independent agency that oversees Fannie Mae and Freddie Mac, extended forbearance by three months for borrowers coming to the end of their forbearance period.
The Biden administration says these coordinated actions will cover 70 percent of existing single-family home mortgages.
To bolster these efforts, the president encourages Congress to pass the American Rescue Plan to deliver more aid to struggling homeowners.
The rescue plan would create a homeowners assistance fund which will provide states with $10 billion to help virus-impacted homeowners catch up on their mortgage payments and utility costs.
“This relief is critical for homeowners with mortgages in the private market who are not able to take advantage of today’s actions and may face longer-term challenges.”
HUD urges all homeowners who are able to make their mortgage payments to continue to do so.
However, homeowners who need COVID-19 mortgage payment assistance should contact their mortgage servicer immediately or consider contacting a HUD-approved housing counseling agency.