The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to extend the moratoria on single-family foreclosures and real estate owned (REO) evictions until at least Dec. 31, 2020.
The foreclosure moratorium applies to GSE-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by Fannie or Freddie through foreclosure or deed-in-lieu of foreclosure transactions.
The current moratoriums were set to expire on August 31.
“This protects more than 28 million homeowners with an enterprise-backed mortgage,” says FHFA Director Mark Calabria.
Under the GSEs’ guidelines for single-family mortgages, homeowners who are adversely impacted by the COVID-19 national emergency may request mortgage assistance by contacting their mortgage servicer. Those homeowners are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months. Homeowners in a forbearance plan will not incur late fees.
For their part, servicers must report the status of the mortgage loan to the credit bureaus in accordance with the Fair Credit Reporting Act, including as amended by the CARES Act, for homeowners impacted by COVID-19. After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification.
Currently, FHFA projects additional expenses of $1.1 billion to $1.7 billion will be borne by the GSEs due to the existing COVID-19 foreclosure moratorium and its extension.