Borrowers with mortgages backed by Fannie Mae or Freddie Mac will be eligible for another three months of forbearance, the Federal Housing Finance Agency announced last week.
The FHFA said in a statement that borrowers with a COVID-19 forbearance plan on Feb. 28 could request an extension of up to three months, giving homeowners with mortgages backed by Fannie Mae or Freddie Mac up to 15 months of forbearance. These borrowers previously could receive up to 12 months of forbearance.
The extension will also affect Fannie and Freddie’s COVID-19 Payment Deferral program. The program allows borrowers to repay their missed payments at the time the home is sold, refinanced or at mortgage maturity. The program will now cover up to 15 months of missed payments.
The FHFA also this week extended until March 31 the moratoriums on single-family foreclosures and evictions from real estate owned (REO) properties that have been acquired by the government-sponsored enterprises. The moratoriums were scheduled to expire Feb. 28.
“To keep families in their home during the pandemic, FHFA is allowing borrowers to be in COVID-19 forbearance for up to 15 months and extending the Enterprises’ foreclosure and eviction extension,” FHFA Director Mark Calabria said in the statement.
The FHFA said it currently projects the GSEs to have expenses of $1.5 billion to $2 billion related to the existing COVID-19 foreclosure moratorium and its extension.
“FHFA continues to monitor the effect of the COVID-19 servicing policies on borrowers, the Enterprises and their counterparties, and the mortgage market,” the statement said. “FHFA may extend or sunset its policies based on the data and the health risk.”
The Mortgage Bankers Association in its weekly Forbearance and Call Volume Survey last week said 3.07 percent of Fannie Mae and Freddie Mac loans were in forbearance for the week ending Jan. 31, a 3-basis-point improvement from the previous week.
Overall, the MBA said 5.35 percent of servicers’ portfolio volume was in forbearance as of Jan. 31, down from 5.38 percent the prior week. The MBA estimated that 2.7 million homeowners are in forbearance plans.
President Joe Biden also announced this week that the nation-wide ban on housing foreclosures has been extended to June 30 to help homeowners struggling during the coronavirus pandemic.
The moratorium on foreclosures of federally guaranteed mortgages had been set to expire on March 31. On his first day in office, Biden had extended the moratorium from Jan. 31. Census Bureau figures show that, nationwide, almost 12 percent of homeowners with mortgages were late on their payments.
The White House says the coordinated actions announced Tuesday by the Departments of Housing and Urban Development, Veterans Affairs and Agriculture also will extend to June 30 the enrollment window for borrowers who want to request mortgage payment forbearance and will provide up to six additional months of forbearance for borrowers who entered forbearance on or before June 30 of last year.
The White House says more than 10 million homeowners are behind on mortgage payments and Biden’s actions are to help keep people in their homes amid “a housing affordability crisis” triggered by the pandemic. It says “homeowners will receive urgently needed relief as we face this unprecedented national emergency.”
Biden’s administration says extending forbearance policies “will provide critical support to homeowners of color, who make up a disproportionate share of borrowers” having trouble paying their loans because of hardships related to the pandemic.
The actions announced Tuesday don’t address a federal moratorium through March 31 on evictions of tenants who’ve fallen behind on rent.
The Associated Press contributed to this report.
