The Federal Housing Administration (FHA) said today (Dec. 21) that it has extended through Feb. 28 its moratorium on evictions and foreclosures for holders of single-family mortgages insured by the division of the U.S. Department of Housing and Urban Development (HUD). The moratoriums had been set to expire on Dec. 31. The FHA's move joins similar extensions put in place by the government-sponsored enterprises Fannie Mae and Freddie Mac, which are part of the independent Federal Housing Finance Agency (FHFA).
Together, those entities guarantee millions of mortgages worth trillions of dollars across the country, and the moratoriums are just the latest in a series of such moves (the fourth by the FHA alone) that began not long after COVID-19 shut down much of the U.S. economy, throwing tens of millions of Americans out of work.
The FHA move also includes extending through Feb. 28 its deadline for borrowers to request an initial forbearance of up to six months on their FHA-insured mortgages and allows an additional forbearance of up to six months after that.
The agency specifies that its moratorium "prohibits servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions for FHA-insured single-family forward and reverse mortgages, except for those secured by legally vacant and abandoned properties."
And something for lenders, servicers, and new buyers
The agency also extended "multiple temporary provisions for lenders and servicers to allow them to continue doing FHA business despite social distancing considerations."
Those include extending the time frame through Feb. 28 for temporary re-verification of employment guidance and the exterior-only appraisal inspection option, along with the temporary provisions for verification of self-employment, rental income, and 203(k) Rehabilitation Mortgage escrow accounts. Also extended, in this case through March 31, is the deadline for providing an insurance endorsement on single-family mortgages in forbearance.
A recognition that the pandemic's effects are not vanishing
Altogether, these moves indicate a recognition from the agencies that guarantee a huge portion of the U.S. housing market that the pandemic, and its effect on the ability for millions of Americans to pay their mortgage and rent, is not going away anytime soon.
"Extensions ensure borrowers can continue to seek assistance and avoid eviction and foreclosure while maintaining temporary policy flexibilities for lenders and servicers," the FHA said in its announcement today. Here is the letter that's being sent to mortgagees.
"COVID-19 has created hardships for millions of Americans. FHA will continue to assist borrowers who are struggling to regain their financial footing as a result of this pandemic. American homeowners should not be forced from their homes while they are seeking help," Federal Housing Commissioner Dana Wade said in the agency's statement.
The Millionacres bottom line
The FHA, just as Fannie Mae and Freddie Mac are doing, is encouraging borrowers -- both homeowners and landlords -- who can make their mortgage payments to keep doing so, and if you're struggling, to go to your servicer to initiate or continue any forbearance arrangements.
It's also important to keep in mind that forbearance is not the same as forgiveness. The loans will need to become current once the forbearance is over, although the FHA stresses that it doesn't require that be done with a lump-sum payment.
The rules can be complex. For more information, here are the FHA's COVID-19 Resources for Homeowners web page as well as the Coronavirus Mortgage and Housing Assistance web pages maintained by the Consumer Financial Protection Bureau.