The Federal Housing Finance Agency extended its moratorium on foreclosures and evictions for borrowers with mortgages backed by Fannie Mae and Freddie Mac until Jan. 31.
This marks the fourth time the government agency has extended the moratorium, now another month past its most recent deadline of Dec. 31. According to FHFA director Mark Calabria, extending Fannie Mae and Freddie Mac’s foreclosure and eviction moratoriums through January 2021 keeps borrowers safe during the pandemic
“This extension gives peace of mind to the more than 28 million homeowners with an Enterprise-backed mortgage,” said Calabria.
Fannie and Freddie’s foreclosure moratorium applies to enterprise-backed, single-family mortgages only. However, the extension also applies to real estate owned (REO) evictions, which are properties that have been acquired by an enterprise through foreclosure or deed-in-lieu of foreclosure transactions.
As a result, the FHFA projects additional expenses of $1.1 to $1.7 billion will be borne by the enterprises due to the existing COVID-19 foreclosure moratorium and its extension. This is in addition to the $6 billion in costs already incurred by the enterprises.
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Per the last three extensions, the FHFA said it will continue to monitor the effect of coronavirus on the mortgage industry and update its policies as needed.
The FHFA recommends those who may be struggling with their mortgage or facing possible foreclosure to review their options with their servicers as soon as possible. Homeowners impacted by COVID-19 are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months, as mandated by the CARES Act.
Foreclosure starts were down significantly in October, declining to 4,700, a 90% year-over-year reduction, according to recent data from Black Knight. Active foreclosure inventory set yet another record low at 178,000 as well.
Mortgage delinquencies overall fell to 6.44%, the lowest level since March, but there are still 3.4 million delinquent mortgages
The FHFA has not yet stated whether it will also extend its policy that allows Fannie and Freddie to buy qualified loans in forbearance. That deadline is set to expire on Dec. 31.