The Federal Housing Finance Agency has extended its moratoriums on single-family foreclosures and real estate-owned evictions until January 31, 2021, at the earliest, the agency announced Wednesday.
The moratoriums, part of the FHFA’s response to the economic impacts of the global pandemic, shields homeowners with mortgages backed by Freddie Mac and Fannie Mae from foreclosures and evictions. Those suspensions were previously set to expire on Dec. 31.
The news is likely welcome for homeowners struggling financially through the crisis as the virus surges and employment slows. The FHFA says more than 28 million homeowners’ loans are backed by the government-sponsored entities, or GSEs, which buy loans from mortgage originators and repackage them as mortgage-backed securities. The agency estimates that the extension will cost the GSEs $1.1 to $1.7 billion dollars.
The announcement is the most recent continuation of the pause on GSE-backed foreclosures and evictions, but far from the first. Counting Wednesday’s announcement, the moratoriums have been extended four times since it was announced in March.
It’s possible—though not guaranteed—that the moratoriums will be extended further. “FHFA will continue to monitor the effect of coronavirus on the mortgage industry and update its policies as needed,” the agency said in its announcement.
The extensions come as homeowners continue to take advantage of programs offered to lessen financial hardship caused by Covid-19. Approximately 3.6% of mortgages backed by the GSEs, and 5.3% of all mortgages, are in forbearance plans, which allow homeowners affected by the pandemic to defer loan payments, according to housing analytics company Black Knight’s most recent weekly forbearance report.
Source: https://www.barrons.com/articles/fhfa-extends-foreclosure-moratorium-to-jan-31-what-to-know-51606953611
