FHFA Extends Foreclosure/Eviction Moratoria through Mar. 28; Extends COVID-Related Loan Flexibilities
The Federal Housing Finance Agency said Fannie Mae and Freddie Mac extended moratoriums on single-family foreclosures and real estate owned evictions until March 31.
The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions.
FHFA also announced borrowers with a mortgage backed by Fannie Mae or Freddie Mac may be eligible for an additional forbearance extension of up to three months. Eligibility for the extension is limited to borrowers who are on a COVID-19 forbearance plan as of February 28, and other limits may apply. Further, COVID-19 Payment Deferral for borrowers with an Enterprise-backed mortgage can now cover up to 15 months of missed payments. COVID-19 Payment Deferral allows those borrowers to repay their missed payments at the time the home is sold, refinanced, or at mortgage maturity.
“To keep families in their home during the pandemic, FHFA is allowing borrowers to be in COVID-19 forbearance for up to 15 months and extending the Enterprises’ foreclosure and eviction extension,” said FHFA Director Mark Calabria.
Currently, FHFA projects expenses of $1.5 to $2 billion will be borne by the Enterprises due to the existing COVID-19 foreclosure moratorium and its extension. FHFA continues to monitor the effect of the COVID-19 servicing policies on borrowers, the Enterprises and their counterparties and the mortgage market.
FHFA also announced Fannie Mae and Freddie Mac extended several loan origination flexibilities until March 31. The changes are designed to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on February 28.
Extended flexibilities include:
–Alternative appraisals on purchase and rate term refinance loans;
–Alternative methods for documenting income and verifying employment before loan closing; and
–Expanding the use of power of attorney to assist with loan closings.