Foreclosure moratorium applies to Enterprise-backed mortgages; eviction moratorium applies to Enterprise-owned properties
Today, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will extend the moratoriums on single-family foreclosures and real estate owned (REO) evictions until February 28, 2021. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions. The current moratoriums were set to expire on January 31, 2021.
“To keep our communities safe, and families in their homes during the COVID-19 pandemic, FHFA is extending Fannie Mae and Freddie Mac’s foreclosure and eviction moratorium,” said Director Mark Calabria.
Currently, FHFA projects additional expenses of $1.4 to $2 billion will be borne by the Enterprises due to the existing COVID-19 foreclosure moratorium and its extension. FHFA continues to monitor the effect of the foreclosure and eviction moratorium on borrowers, the Enterprises and their counterparties, and the mortgage market and extend or sunset its policies based on the data and health risk.
The Enterprises continue to offer comprehensive loss mitigation programs for borrowers with eligible hardships. These programs, which were established pre-pandemic and have helped more than 4.5 million families stay in their home, will remain available even when COVID-19 forbearance flexibilities end.
Under the comprehensive loss mitigation programs, qualified borrowers with a financial hardship that affects their ability to pay their mortgage may be eligible for temporary forbearance of up to 12 months, whether their hardship was caused by COVID-19 or not. Qualified borrowers can also obtain loan modifications to assist their ability to resume regular monthly payments once their hardship is resolved.