On Wednesday, the Department of Housing and Urban Development announced that the Federal Housing Administration is providing a two-month extension of its foreclosure and eviction moratorium through August 31, 2020. This is the second extension the FHA has enacted since the COVID-19 pandemic began, the first was on May 14 when the moratorium was extended to June 30.
The single-family foreclosure and eviction moratorium extension applies to homeowners with FHA-insured Title II Single-Family forward and Home Equity Conversion mortgages. With this extension, the FHA intends to provide additional security and relief to homeowners attempting to financially recover from the current economic climate, a HUD release said.
“While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” said HUD Secretary Ben Carson. “Our foreclosure and eviction extension means that these families will not have to worry about losing their home as they work to recover from the financial impacts of COVID-19.”
The moratorium directs mortgage servicers to halt all new foreclosure actions and suspend all foreclosure actions currently in progress, excluding legally vacant or abandoned properties. It also directs servicers to cease all evictions of persons from FHA-insured Single-Family properties, excluding actions to evict occupants of legally vacant or abandoned properties.
The two-month extension is not the FHA’s first temporary policy change put in place to assist borrowers during COVID-19. At the beginning of June, the FHA enacted a policy shift aimed at borrowers who met all FHA requirements for a mortgage at the time of closing but were impacted by the pandemic before receiving the FHA’s endorsement for insurance on the loan.
The FHA does state that homeowners with FHA-insured mortgages must continue to make their mortgage payments if they are able to do so, or seek mortgage payment forbearance pursuant to the CARES Act from the mortgage servicer.