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FHFA Extends Foreclosure and Eviction Bans to June 30

Homeowners with mortgages held by Fannie Mae or Freddie Mac cannot be evicted through June 30, nor can renters in buildings acquired by the lending giants. Forbearance was also extended for three additional months, allowing some owners to skip mortgage payments for a total of 18 months.

WASHINGTON – The Federal Housing Finance Agency (FHFA) announced extensions of several measures – foreclosures, evictions and forbearance – to “align COVID-19 mortgage relief policies across the federal government.”

Foreclosures

FHFA announced that Fannie Mae and Freddie Mac – two massive secondary mortgage lenders that own over half of all U.S. mortgages – have extended their moratorium on single-family foreclosures and real estate owned (REO) evictions until June 30, 2021.

The moratorium applies only to single-family mortgages held by Fannie and Freddie.

The REO eviction moratorium applies to properties acquired by Fannie and Freddie through foreclosure or deed-in-lieu of foreclosure transactions. The current moratoriums have been extended and, under the latest guidelines before this announcement, were set to expire on March 31, 2021.

Forbearance

FHFA also announced that borrowers with a Fannie- or Freddie-backed mortgage may be eligible for an additional three-month extension of COVID-19 forbearance, which allows homeowners to forego mortgage payments for a limited period of time. Once forbearance ends, the homeowner may be allowed to pay back the full amount owed, tack the missed payments onto the end of their mortgage period, or pay the money back when the house is sold, under FHFA’s COVID-19 Payment Deferral program.

With a dearth of for-sale homes currently on the market, some homebuyers have been hoping for a spike in foreclosure inventory. However, the forbearance extension makes that unlikely until at least July or later – and if the COVID-19 vaccine works as hoped by summer, more of those homeowners may be able to return to work and avoid foreclosure altogether.

The additional three-month extension now allows borrowers to be in forbearance for up to 18 months, though eligibility is limited to borrowers already in a COVID-19 forbearance plan as of Feb. 28, 2021. Other limits may apply.

“Borrowers and the housing finance market alike can benefit during the pandemic from the consistent treatment of mortgages regardless of who owns or backs them,” says FHFA Director Mark Calabria. “Today’s extensions of the COVID-19 forbearance period to 18 months, and foreclosure and eviction moratoriums through the end of June, will help align mortgage policies across the federal government.”

FHFA says it “continues to monitor the effect of the COVID-19 servicing policies” on borrowers, and the mortgage market, and it may “extend or sunset its policies based on updated data and health risks.” That suggests that FHFA reserves the right to cancel the moratoriums if the pandemic fades, but it could also extend them past June 30 if it thinks the move is justified.

Homeowners and renters can visit the Consumer Financial Protection Bureau’s website for updated information on relief options, protections and key deadlines.

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