At this point, 2021 is probably going to be a very tough year for some homeowners who are behind on their payments or barely able to stay above water.
The government has been helping to stem the tide but, how long will that last?
Recently The Federal Housing Finance Authority (FHFA) and Department of Housing and Urban Development (HUD) announced its 4th extension.
The foreclosure and eviction moratorium will be extended through January 31, 2021.
The extension was originally set to expire on December 31. Thankfully, this gives homeowners an extra month to prepare or execute the plan they had in place.
What this means is, for homeowners with FHA-insured single-family mortgages covered under the Coronavirus Relief and Economic Security (CARES) Act your lender cannot foreclose or evict you for non-payment.
According to the FHFA director, “extending Fannie Mae and Freddie Mac’s foreclosure and eviction moratoriums through January 2021 keeps borrowers safe during the pandemic.”
It is great that the government has extended the moratorium, but unfortunately, it is not going to be enough.
The good news is, the FHA says it will continue to monitor the effect of coronavirus on the mortgage industry and update its policies as needed.
Will the foreclosure moratorium be extended again?
Based on that statement, we could see another extension in January or some other form of help for homeowners, but that is all speculation at this point.
Currently, FHFA projects additional expenses of $1.1 to $1.7 billion will be borne by the Enterprises due to the existing COVID-19 foreclosure moratorium and its extension.
Also in addition to the $6 billion in costs already incurred by the Enterprises.
What The FHA Requires of Mortgage Servicers
- Stop all new foreclosure actions and suspend all foreclosure actions currently in process for FHA-insured single-family properties, excluding legally vacant or abandoned properties.
- Cease all evictions of persons from FHA-insured single-family properties, excluding actions to evict occupants of legally vacant or abandoned properties.
- Offer borrowers with FHA-insured mortgages delayed mortgage payment forbearance when the borrower requests it, with the option to extend the forbearance for up to a year. 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.
- Assess borrowers who are not eligible for the COVID-19 National Emergency Standalone Partial Claim for one of FHA’s COVID-19 expanded home retention solutions announced on July 8, 2020.
Although making your payments can be challenging. The FHA encourages homeowners to continue making their mortgage payments during the foreclosure and eviction moratorium if they can do so.
If you require assistance, contact your mortgage servicer or a HUD-approved counselor in your area.