New Foreclosure Moratorium & What You Need To Know

Just a few weeks after FHA’s foreclosure & eviction moratorium extension, FHA and HUD once again approved another extension.

Previously, the moratorium only covers until the end of January 2021 but the fourth extension will give homeowners another month of protection, until February 28, under the CARES Act. Still, the foreclosure & eviction moratorium only applies to FHA-insured single-family mortgages.

The FHA’s moratorium bans servicers from initiating or proceeding with foreclosure and foreclosure-related eviction actions for FHA-insured single-family mortgages as well as reverse mortgages, except for those secured by legally vacant and abandoned properties.

Included in this extension is the deadline to request an initial COVID-19 forbearance. Again, this only applies to borrowers with FHA-insured single-family mortgages. Borrowers can request from their servicers to defer or reduce their mortgage payments for up to six months. After this, it may be extended additional six months

In addition, the FHA said in a press release, it also has extended multiple temporary provisions for lenders and servicers to allow them to continue doing FHA business despite social distancing considerations.

Lenders and Servicers

Furthermore, FHA also extended multiple temporary provisions for lenders and servicers. Such provisions will allow them to continue doing FHA business despite social distancing considerations.

Dana Wade, Assistant Secretary for Housing and Federal Housing Commissioner promised the FHA with its continued assistance. Wade vows to assist borrowers who are facing financial difficulties due to the national health crisis.

“COVID-19 has created hardships for millions of Americans,” Wade said. “American homeowners should not be forced from their homes while they are seeking help.”

Below is an outline of the FHA’s additional provision following the fourth extension;

Extension of the timeframe for providing an insurance endorsement on single-family mortgages in forbearance through March 31, 2021.
Temporary re-verification of employment guidance and exterior-only appraisal inspection option will be accepted until February 28, 2021.
Provisions for verification of self-employment, rental income, and 203(k) Rehabilitation Mortgage escrow accounts will be allowed through February 28, 2021.

Recommendations

FHA encourages borrowers to continue making their mortgage payments if they are able to do so.

As for those who continue to struggle financially due to COVID-19, should engage with Analytics Before Foreclosure for actionable intelligence on how to get back on track.

For those whose mortgages are not FHA-insured, you have to get in touch with Analytics Before Foreclosure to come up with favorable options for you and your family.