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Fannie Mae and Freddie Mac say they will extend their eviction and foreclosure moratoriums through Dec. 31 as the economic damage from the coronavirus crisis looks increasingly likely to last around the country.
The moratoriums were originally set to expire Aug. 31 and apply to properties with single-family mortgages backed by both government-sponsored enterprises (GSEs). The suspension of evictions applies only to homes owned by Fannie Mae or Freddie Mac and does not apply to tenants in homes that have not been foreclosed.
“To help keep borrowers in their homes during the pandemic, FHFA is extending the Enterprises’ foreclosure and eviction moratoriums through the end of 2020,” Federal Housing Finance Agency Director Mark Calabria said in a statement. “This protects more than 28 million homeowners with an Enterprise-backed mortgage.”
The FHFA projects additional expenses of $1.1 to 1.7 billion will be borne by the GSEs due to the existing COVID-19 foreclosure moratorium and its extension.
“Fannie Mae, along with our lending and servicing partners, remains committed to supporting households who are experiencing job loss, a reduction in work hours or income, or other issues due to COVID-19,” said Fannie Mae Senior Vice President Malloy Evans said in a statement. “With this latest extension of the foreclosure and eviction moratorium, we can continue to help ensure distressed borrowers are able to remain in their homes during this national emergency.”
Fannie Mae said in its announcement that homeowners who are adversely impacted by the COVID-19 national emergency may request mortgage assistance by contacting their mortgage servicer and added that homeowners impacted by COVID-19 are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.
Homeowners in a forbearance plan will not incur late fees, Fannie Mae said. Servicers must report the status of the mortgage loan to the credit bureaus in accordance with the Fair Credit Reporting Act, including as amended by the CARES Act, for homeowners impacted by COVID-19. After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification
