White House Announces Extension of Foreclosure Moratorium, HUD Postpones Service Review

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Joe Biden’s administration announced Thursday that the alienation and eviction moratorium, which expires at the end of this month, will be extended for another 30 days and will take effect on July 31, 2021. This is stated in a series of announcements. issued by federal agencies including the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA), the United States Department of Agriculture (USDA) and the Consumer Financial Protection Bureau (CFPB), in conjunction with the White House.

While much of the new efforts to tackle homelessness by extending these moratoriums are focused on tenants, homeowners should also benefit from these actions if they have mortgages backed by the appropriate federal agencies, according to the White House.

HUD also announced on Thursday that the previously described fixes with regard to servicing single family mortgages and a loss mitigation policy on both the forward and backward side of the business, the implementation date will be delayed. These changes, originally slated for implementation in August, include the codification of a new reverse mortgage policy, as well as the complete or partial abolition of certain letters of mortgage (ML) that apply to the Home Mortgage Lending Program (HECM).

Helping homeowners to extend the term

The foreclosure deadline has previously been extended several times during the COVID-19 coronavirus pandemic, but the White House is keen to make it clear that the renewal set out in today’s announcement will take into account the last time that deadline is rescheduled.

“Three federal agencies that issue mortgage loans – [HUD, VA, and USDA] – will extend the corresponding moratorium on foreclosure for one, the last month, until July 31, 2021, “the White House said in a statement. “The Federal Housing Finance Agency (FHFA) will also announce that it has extended the moratorium on Fannie Mae and Freddie Mac mortgages until July 31, 2021.”

The announcement says that helping homeowners and renters still recovering from the economic fallout of the pandemic simply takes more time to get back on their feet, and the government is unwilling to set a deadline that could exacerbate the housing situation of vulnerable populations.

“Once the moratorium ends, HUD, VA and USDA will take additional steps to prevent foreclosures from these agencies until borrowers are reviewed for available optimized COVID-19 mitigation options while FHFA continues to operate. with Fannie Mae and Freddie Mac to ensure borrowers are assessed for pre-foreclosure retention solutions, ”the White House said.

For homeowners who have not yet taken advantage of the various abstinence options that the government has provided to clients with government-backed mortgages, the respective supporting agencies will extend the deadline for borrowers who need to explore these options until later this year. , also.

“HUD, VA and USDA will also continue to allow homeowners who did not take advantage of the leniency prior to September 30, 2021, to enter into abstinence conditions due to COVID, while homeowners with mortgages secured by Fannie Mae or Freddie Mac, which are related to COVID. in connection with COVID will continue to have the right to abstain from adversity, “- said in the White House. “Finally, HUD, VA and USDA will announce additional steps in July to offer borrowers options to reduce payments that will allow more homeowners to stay in their homes.”

Delay in new service rules

In late April, HUD released an update on upcoming changes to FHA’s Single Family Housing Policy Guideline 4000.1, which also includes the latest FHA Defects Taxonomy, which details many of the ways in which direct and reverse mortgage loans assertions may fail based on a number of scenarios involving inadequate or inadequate documentation.

On Thursday, with the publication of ML 2021-14, the FHA announced that the implementation deadline for the previously described Guidelines changes to be used by mortgage lenders would be pushed back from August 17, 2021 to March 31, 2022. The delay was also cited in this case as the need for additional recovery time due to the economic impact of the pandemic.

“Due to the ongoing COVID-19 pandemic, mortgage lenders are facing a large number of COVID-19-affected borrowers seeking help to reduce losses,” the new ML says in part. “HUD recognizes that the resources required to implement changes to Guideline 4000.1 may cause delays in helping these Borrowers resolve their delinquencies and avoid foreclosures. To mitigate the impact on both Borrowers and Pledges, HUD is extending the implementation period to give Pledges additional time to implement the changes. ”

The previous guide said that certain MLs that have been released in the past will be superseded by the new Guidelines, in whole or in part. For those who have been replaced entirely, they are all relatively recent releases, and all but one have been donated by the Donald Trump administration and former HUD secretary Dr. Ben Carson. The only exception to this rule ML 2021-04released on January 26 this year, expanding and updating the rules regarding requests for mortgage abstinence for mortgage borrowers affected by the economic impact of the COVID-19 coronavirus pandemic, including the delay in HECM loan requests due and payable.

The other two ML are completely replaced (2020-48 which applied mainly to industrial houses, and 2019-18, which concerned a limited mortgage loan of 203 thousand, respectively) are not related to the HECM program.

For partially replaced ML: ML 2021-05 Delivered in February, similarly related to the foreclosure and eviction moratorium imposed by the FHA for single-family mortgages. ML 2020-38 was about updates to the Catalyst FHA software claims handling module and does not appear to have any meaningful relevance to the HECM program.

Read White House ad extending the moratorium and ML 2021-14 in the HUD.

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