With the federal foreclosure moratorium expiring next week, the Biden administration on Friday announced that it is taking steps to prevent foreclosures for those with state-backed mortgages.
Last month, the Centers for Disease Control and Prevention announced that they are extending the pause on foreclosures for the last time. The CDC decided to lift the moratorium despite the fact that on July 5 Census Bureau survey indicated that 3.6 million people said they were likely to have to leave their homes in the next two months due to evictions.
In an effort to lessen the impact, the Biden administration on Friday announced it is taking steps to help some homeowners by cutting borrowers’ monthly principal and interest payments (P&I).
According to White House statementHomeowners with government-backed mortgages through the HUD, USDA and VA will receive “enhanced assistance” in an effort to prevent foreclosure.
The White House says the Federal Housing Authority “will require mortgage services to offer a free option to eligible homeowners who can resume their current mortgage payments.” For those unable to renew their monthly mortgage, HUD will “enhance the support staff’s ability to provide all eligible borrowers with a 25% reduction in profit and loss.”
In addition, the USDA and VAS will provide “new alternatives for borrowers to help them achieve a 20% reduction in monthly P&I payments.”
“This brings the options for homeowners with HUD, USDA and VA backed mortgages closer to the options for homeowners with mortgages backed by Fannie Mae and Freddie Mac,” the White House said in a statement.