The Biden administration today re-upped the foreclosure ban for federally backed mortgages for a final month.
The White House said in a statement that three federal agencies that back mortgages — the United States Department of Agriculture (USDA), the Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD) — would extend the pandemic-related foreclosure ban until the end of July.
The Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, will similarly extend its foreclosure limit through the end of July. FHFA has a newly-appointed acting director, veteran regulator Sandra Thompson. On Wednesday, the Biden administration ousted Trump-appointee Mark Calabria following a Supreme Court ruling that eliminated restrictions on firing the FHFA director.
The actions are intended to “stabilize homeowners and support a return to a more stable housing market,” the White House said.
The White House also said it would also extend the Centers for Disease Control limits on evictions through the end of July. The protections were slated to expire at the end of June.
As borrowers impacted by COVID-19 continue to exit mortgage forbearance, now is the time for lenders and servicers to be proactive in their borrower outreach to reduce foreclosure volume.
Presented by: Computershare Loan Services
Industry groups had previously urged Biden to allow the protections to sunset as planned.
Plans are also underway for how to prevent foreclosures on mortgages backed by federal agencies, when the foreclosure bans do eventually expire. For mortgages backed by HUD, the VA and the USDA, those efforts include a review for streamlined, affordable loss mitigation options.
The FHFA, which is controlled by the executive branch, will “work with Fannie Mae and Freddie Mac to ensure that borrowers are evaluated for home retention solutions prior to any referral to foreclosure,” the White House said in a statement Thursday.
Until the end of September, HUD, USDA and VA borrowers who haven’t yet used any forbearance options can still enter into an agreement to put off payments. Those with Fannie Mae and Freddie Mac-backed mortgages can also still enter into new forbearance agreements.
As the foreclosure bans draw to an end, the federal government is turning its focus to reducing payments for borrowers. HUD, VA and USDA will announce “additional steps in July to offer borrowers payment reduction options that will enable more homeowners to stay in their homes,” the White House said.