FHFA, HUD Suspend Foreclosures/Evictions for 60 Days

HUD and the Federal Housing Finance Agency a short while ago announced they would suspend foreclosures and evictions for Fannie Mae, Freddie Mac and FHA mortgages for at least the next 60 days amid the coronavirus pandemic.

The FHFA foreclosure and eviction suspension applies to homeowners with a government-sponsored enterprise-backed single-family mortgage; HUD said the suspension applies to FHA-backed mortgages.

“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.”

Earlier this month, FHFA announced Fannie Mae and Freddie Mac would provide payment forbearance to borrowers impacted by the coronavirus, allowing for a mortgage payment to be suspended for up to 12 months due to hardship caused by the coronavirus.

“The servicer should evaluate the borrower for a forbearance plan or other workout assistance in accordance with our existing requirements,” FHFA said. “We also want to remind servicers that they must have a business continuity plan in place to support their ongoing ability to conduct business operations in the event of an interruption to business operations and processes.”

The FHA Single-Family Housing Policy Handbook 4000.1 Section III.A.2 describes steps mortgagees can take to offer services to borrowers who are experiencing distressed conditions that prevent them from making mortgage payments and going into foreclosure.

“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 Ben 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.”

The guidance issued under Mortgagee Letter 2020-04 (https://www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf) applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages, and directs mortgage servicers to:

• Halt all new foreclosure actions and suspend all foreclosure actions currently in process; and
• Cease all evictions of persons from FHA-insured single-family properties.

“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 Brian Montgomery. “Our actions today make it clear where the priority needs to be.”

The FHFA announcement is available at https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Suspends-Foreclosures-and-Evictions-for-Enterprise-Backed-Mortgages.aspx.