Article Courtesy of: Banker & Tradesman

The Federal Housing Administration and the Federal Housing Finance Agency have extended their COVID-19 foreclosure and eviction moratoriums for the second time, this time for two months.

The FHA’s measures will expire Aug. 31. A first extension issued mid-May would have expired June 30. The measures cover homeowners with FHA-insured Title II single family mortgages and including reverse mortgages.

In its announcement, the FHA encouraged mortgage servicers to: halt all new foreclosure actions and suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties, and cease all evictions from FHA-insured single family properties, excluding actions to evict occupants of legally vacant or abandoned properties.

“While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” HUD Secretary Ben Carson said in a statement. “Our foreclosure and eviction extension means that these families will not have to worry about losing their home as they work to recover from the financial impacts of COVID-19.”

Homeowners with FHA-insured mortgages should continue to make their mortgage payments during the foreclosure and eviction moratorium if they are able to do so, HUD said, or seek mortgage payment forbearance from their mortgage servicer under the terms of the CARES Act , if needed.

Under that legislation, mortgage servicers are required to:
Offer borrowers with FHA-insured mortgages up to a year 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.

The FHFA also extended its single-family moratorium on foreclosures and evictions until at least Aug. 31. The foreclosure moratorium applies only to single-family mortgages backed by Fannie Mae and Freddie Mac. The current moratorium was set to expire on June 30.

“To protect borrowers and renters during the pandemic we are extending the Enterprises’ foreclosure and eviction moratorium,” FHFA Director Mark Calabria said in a statement. “During this national health emergency no one should worry about losing their home.”

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