White House allows more homeowners to be eligible for lower mortgage payments

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WASHINGTON – Homeowners with certain government-backed mortgages can get a 25 percent reduction in their monthly payments if they are still struggling to make payments– said the White House on Friday as part of efforts to ensure that people are left to live in a pandemic.

The move is aimed at those with loans from their departments of housing and urban development, agriculture, or veterans affairs. According to the White House, they will be closer to those supported by Fannie Mae and Freddie Mac.

Homeowners who are still “looking for work, retraining, having trouble paying taxes and insurance, or continuing to struggle for another reason,” are entitled to do so, the statement said.

“Where agencies are empowered and depending on the financial conditions of the homeowners, agencies will require or encourage mortgage officers to offer borrowers new options for reducing payments to help them stay in their home.”

The Biden administration has taken several steps to protect homeowners during the COVID-19 outbreak, including: extension of the moratorium on eviction until July 31st. The pandemic has turned the country’s economy upside down since its inception in early 2020 and has claimed more than 600,000 deaths.

IN Consumer Financial Protection Bureau new protections for homeowners in need were finalized last month as it seeks to stave off a wave of foreclosures in the coming months, but it stopped short without waiting for a full ban.

Black and Hispanic mortgage borrowers in the US are far more likely to break the law or participate in a “leniency” program than white borrowers, according to the CFPB, highlighting how the COVID-19 crisis is exacerbating systemic racial disparities.

The consumer watchdog agency is also scrutinizing mortgage services’ compliance with pandemic relief programs, according to a Reuters report.

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