FHFA, FHA Extend Foreclosure/Eviction Moratorium to June 30
The Federal Housing Finance Agency and FHA said yesterday they would extend moratoria for Fannie Mae-, Freddie Mac- and FHA-based single-family mortgages until at least June 30.
The current moratoria were set to expire May 17.
“During this national health emergency, no one should be forced from their home,” said FHFA Director Mark Calabria. “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families.”
FHA said its foreclosure and eviction moratorium would extend through June 30 for homeowners with FHA-insured Single Family mortgages, while also supporting new FHA-insured mortgage originations through an extension of temporary policy flexibilities for lenders and appraisers. FHA’s Single-Family foreclosure and eviction moratorium extension announced today applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages.
Additionally, the Single-Family mortgage origination policy extensions allow alternatives for lenders to re-verify a borrower’s employment and for appraisers to conduct desktop or exterior-only appraisals, to continue through June 30. These temporary measures allow lenders and appraisers to continue their necessary work for new FHA-insured mortgages in light of social distancing requirements.
“We made it clear at the beginning of this pandemic that no American should have to worry about losing their home amidst a crisis,” said HUD Secretary Ben Carson. “Today’s announcement ensures that commitment. 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.”
HUD said homeowners with FHA-insured mortgages must continue to make their mortgage payments during the foreclosure and eviction moratorium if they are able to do so, or seek mortgage payment forbearance pursuant to the CARES Act from their mortgage servicer, to avoid future foreclosure actions when the moratorium expires.
Pursuant to the CARES Act, FHA requires mortgage servicers to:
–Offer borrowers with FHA-insured mortgages up to six months or more of delayed mortgage payment forbearance when the borrower requests it. FHA does not require a lump sum payment at the end of the forbearance period.
–Assess borrowers who receive COVID-19 forbearance for its special COVID-19 National Emergency Standalone Partial Claim before the end of the forbearance period.
The COVID-19 National Emergency Standalone Partial Claim puts all deferred mortgage payment amounts owed into a junior lien which is only repaid when the borrower sells the home, refinances the mortgage, or the mortgage is otherwise extinguished.
Calabria said FHFA will continue to monitor the coronavirus situation and update policies as needed.
The moratorium extension marks the third major FHFA announcement this week in the wake of the coronavirus pandemic. On Wednesday, FHFA and the government-sponsored enterprises announced a new payment deferral option allowing borrowers in COVID-19 related forbearance, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced or at maturity (https://www.fhfa.gov//Media/PublicAffairs/Pages/FHFA-Announces-Payment-Deferral-as-New-Repayment-Option-for-Homeowners-in-COVID-19-Forbearance-Plans.aspx).
On Tuesday, FHFA, the Consumer Financial Protection Bureau and HUD launched a new mortgage and housing assistance website designed to ensure homeowners and renters have current and accurate housing assistance information during the COVID-19 national emergency (https://www.cfpb.gov/housing).