Key Highlights
- FHFA extended it moratorium on evictions and foreclosures with mortgages backed by Fannie Mae and Freddie Mac until January 31
- This is fourth time FHFA has extended moratorium
- Extension applies only to Fannie or Freddie- backed single-family mortgages
The more than 28M homeowners with mortgages backed by either Fannie Mae or Freddie Mac may now breathe and sleep a bit better. The Federal Housing Finance Agency (FHFA) recently announced that it has extended its moratorium on foreclosures and evictions from December 31, 2020 to January 31, 2021.
This moratorium extension applies only to homeowners with mortgages backed by either Fannie or Freddie and to the real estate owned (REO) evictions on properties that have been acquired by Fannie or Freddie through either foreclosure or deed-in-lieu of foreclosure transactions.
This is the fourth time the FHFA has extended its moratorium deadline on foreclosures and evictions. As with its previous extensions, the FHFA indicated that it will continue to monitor the COVID impact on the mortgage industry and to update its policies and decisions as needed.
Thus far, the COVID foreclosure moratorium and its three previous extensions have already cost $6B to the General Service Enterprise (GSE) comprised of Fannie Mae and Freddie Mac together. This additional moratorium extension will add a projected $1.1 to $1.7B to the $6B in costs.
For GSE borrowers, the FHFA encourages mortgage holders who are struggling or facing potential foreclosure to talk with their lenders/mortgage services as soon as possible. GSE mortgage holders negatively impacted by COVID-19 are still eligible to apply for a forbearance plan to either suspend or reduce their mortgage payments for up to 12 months.
In October, according to Black Knight, foreclosure starts were down to a 90% year-over-year reduction and active foreclosure inventory set a record low at 178,000. Even though mortgage delinquencies dropped to just 6.44%, the lowest share since March 2020, there are still 3.4M mortgages in delinquency.
Thanks to the Federal Housing Financing Agency, Black Knight and HousingWire.
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