Fed agencies hit pause button on foreclosures and evictions

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OKLAHOMA CITY – The federal government has suspended foreclosures and evictions on home mortgages for 60 days, until mid-May.

The moratorium includes the U.S. Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). According to the Wall Street Journal, about 182,000 homeowners are in some stage of the foreclosure process.

HUD Secretary Ben Carson, in consultation with the Trump Administration and the Coronavirus Task Force, on March 18 authorized the Federal Housing Administration (FHA) to implement an immediate foreclosure and eviction moratorium for single-family homeowners with FHA-insured mortgages for the next 60 days. 

The moratoriums are part of efforts to address impacts to the finances of American individuals, families, and businesses caused by the coronavirus (COVID-19). “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,” Carson said.

The guidance 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 foreclosures 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,” Federal Housing Commissioner Brian Montgomery said. “As such, we want to provide FHA borrower households with some immediate relief given the current  circumstances.” FHA continues to encourage servicers to offer its suite of loss-mitigation options to distressed borrowers – including those that could be impacted by the coronavirus – to help prevent them from going into foreclosure.

These include short and long-term forbearance options, mortgage modifications, and other mortgage payment relief options available based on the borrower’s individual circumstances. Fannie Mae and Freddie Mac announced Wednesday they also will hit the pause button. Both will suspend mortgage foreclosures and property evictions for 60 days to provide financial relief to beleaguered American homeowners suffering from the economic impact of the coronavirus.

Together, Fannie Mae and Freddie Mac backstop approximately $5 trillion of home loans – or about half of the U.S. housing market. Fannie Mae and Freddie Mac do not offer loans; instead, they purchase loans and package them as securities which are subsequently sold to investors.

The Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac, will also extend mortgage payment relief to borrowers who require it as they struggle with job cuts and lost income. FHFA Director Mark Calabria also said that Fannie Mae and Freddie Mac will suspend property evictions for 60 days in order to prevent a potential increase in public health risks which might occur if more Americans were on the streets.