The Federal Housing Finance Agency on Wednesday extended the foreclosure and eviction moratorium for borrowers with mortgages backed by Fannie Mae and Freddie Mac until “at least” Aug. 31, the federal watchdog said.
“During this national health emergency no one should worry about losing their home,” said FHFA Director Mark Calabria, who oversees the two mortgage companies that back more than half of the outstanding mortgages in the U.S.
The FHFA will continue to monitor the COVID-19 pandemic and “update policies as needed,” the agency said in a statement.
The moratorium would primarily apply to the 2 million mortgages that were in default at the end of February, as measured by Black Knight. Both the delinquency rate and foreclosure rate for mortgages reached multi-decade lows before the pandemic began hitting the U.S. at the end of February.
While delinquency rates jumped in the first quarter from a record low in the final three months of 2019, as measured by the Mortgage Bankers Association, the number includes home loans that are in forbearance, meaning they’re not currently in danger of foreclosure.
Borrowers with Fannie Mae and Freddie Mac mortgages are eligible for forbearance of up to one year if they are impacted by COVID-19, as mandated by the CARES Act passed by Congress. But, borrowers have to be current on their mortgage payments to qualify.
According to Black Knight, the number of loans with suspended payments dropped to 4.66 million last week, the second consecutive week of declines, as states reopened their economies and workers returned to jobs. Measured as a share of all mortgages, forbearances dropped to 8.8% from 8.9% in the prior week.