With coronavirus cases spreading through the United States and many Americans feeling the economic impact, the Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for 60 days to aid borrowers at risk of losing their homes.
The two government-sponsored enterprises (GSEs) will hold off on foreclosures and evictions on single-family mortgages for at least 60 days due to the COVID-induced national emergency, which was issued by the White House late last week.
“This foreclosure and eviction suspension allows homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” said Mark Calabria, director of the FHFA. “As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible. The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.”
The move is the second official action this month from the FHFA to provide financial relief to holders of GSE-backed mortgages whose employment situations may be affected by the global pandemic. The FHFA had previously announced that payment forbearance would be available to borrowers of Fannie- and Freddie-insured mortgages, allowing mortgage payments to be suspended up to 12 months due to coronavirus-related hardship.
Similarly, the Department of Housing and Urban Development also announced an immediate 60-day moratorium on foreclosures and evictions for single-family homeowners with mortgages backed by the Federal Housing Administration (FHA).
“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” said HUD Secretary Ben Carson. “The health and safety of the American people is of the utmost importance to the Department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”
“This is an uncertain time for many Americans, particularly those who could experience a loss of income,” added Federal Housing Commissioner Brian Montgomery. “As such, we want to provide FHA borrower households with some immediate relief given the current circumstances. Our actions today make it clear where the priority needs to be.”
