FHA Extends Eviction Moratorium, But Foreclosures Scheduled Reopens



The Federal Housing Administration (FHA) on Friday announced that it is extending the eviction moratorium specifically related to foreclosures for an additional 30 days until the end of September 2021, but that the previously extended foreclosure moratorium still expires at the end of July. This is stated in the publication Mortgagee Letter (ML) 2021-1919, available Friday afternoon.

The move follows announcement made by President Joe Biden last Thursday, who pledged that federal agencies will use their full powers to extend their eviction moratoriums through the end of September to provide ongoing protection for federally insured single households. characteristics.

Moratorium on foreclosures still expires on July 31

The new ML aims to make it clear that foreclosure evictions will still not be allowed until the end of September, but the previously imposed moratorium on foreclosures will continue to take place as planned.

“The HUD moratorium expires on July 31, 2021, and HUD is not extending this moratorium any further,” ML says in part. Accordingly, foreclosures of FHA-insured mortgages may be initiated or renewed after the expiration of the FHA-mandated foreclosure moratorium.

The moratorium on foreclosures was last extended in ML 2021-15 published at the end of June, the last time such a moratorium was extended since its introduction in ML 2020-04, which was published immediately after then President Donald Trump announced a moratorium on all foreclosures and evictions at the start of the COVID-19 pandemic.

Moratorium on evictions extended

However, the FHA recognizes that foreclosures evictions will exacerbate the plight of many people who have been economically negatively impacted by the ongoing pandemic, especially as the new variant is showing resilience in persisting new infections even among those who have been fully vaccinated. according to at the Centers for Disease Control and Prevention (CDC).

“To avoid displacement of severely distressed borrowers and give them time to access suitable housing options after foreclosure, HUD is extending the foreclosure eviction moratorium originally announced on March 18, 2020 in ML 2020-04 for those who own a single family mortgage was secured, with the exception of officially vacant or abandoned property, ”ML said. “During the moratorium, the Pledgee must not initiate or continue eviction with the aim of taking possession of the alienated property.”

The US Department of Housing and Urban Development (HUD) expects this latest expansion to provide borrowers with the additional time and opportunity they may need to access existing federal, state or local resources to bolster their housing stability, ML reported. Or, victims can contact HUD-certified housing counselors to learn more about the options available to them.

The letter states that the affected programs under this new ML are “All FHA Single Family Forward Mortgages (Reverse), Title II, and Home Equity Conversion Programs, excluding FHA-insured mortgages secured by vacant or abandoned real estate “.

As previously reported reporter for mortgage agency HousingWire Georgia Cromray, U.S. Supreme Court Justice Brett Cavanaugh wrote a one-page opinion this limits President Biden from unilaterally extending the eviction ban imposed by the Centers for Disease Control and Prevention (CDC). This prompted the White House to go directly to HUD, the United States Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA), leading to this latest guidance from HUD and FHA.

Lopa P. Colluri, FHA’s Chief Assistant Assistant Secretary for Housing, described the importance of action by the federal government’s housing unit to help people avoid eviction from their homes as much as possible.

“We must continue to do everything in our power to ensure that foreclosure borrowers affected by the pandemic have the time and resources to provide safe and stable housing, whether in their current homes or through alternative housing options.” Colluri said in a statement accompanying the OD. “We do not want any individuals or families to be unnecessarily forced to leave their homes in an attempt to recover from a pandemic.”

RMD has reached out to FHA for comment on the latest guidance, but received no response at the time of publication. As before, the FHA encourages anyone having trouble meeting their forward or reverse mortgage obligations to contact their loan agent immediately to determine what assistance options may be available to them.

“By contacting their support staff, borrowers can get a deferred mortgage payment or HECM extension,” the statement said. “With regard to FHA forward mortgages, the FHA also encourages borrowers to interact with their mortgage service when their mortgage service contacts them about a new COVID-19 advance loan modification or how to bring their mortgage up to date. Borrowers who wish to learn more about the options available to them should also consider contacting a HUD-approved housing advisory agency. ”

Recent actions taken to ‘protect’ the MMI Foundation

The FHA has also taken additional steps forward to better protect the Mutual Mortgage Insurance Fund (MMI), which is the same fund that houses the HECM program. As reported by the HW Media website Housing Wire According to mortgage journalist Maria Volkova, FHA has unveiled a new COVID-19 recovery “waterfall” in ML 2021-18.

“The FHA continues to assess both the impact of the pandemic on its portfolio and the economic performance of the broader recovery,” ML said. “While economic performance is trending positively, the FHA has determined that given the nature of the challenges homeowners face with COVID-19, broader payment facilitation may be required to support sustainable and equitable recovery, and to protect the Mutual Fund. mortgage insurance (MMIF). … “

To read ML 2021-19 in the HUD.


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