In the release of the Mortgagee’s First Letter (ML) in connection with the Home Equity Conversion Mortgage (HECM) program announced during the new Biden administration, the US Department of Housing and Urban Development (HUD) extended a moratorium on foreclosures already instituted. and evictions until March 31. This is according to the ML 2021-03 publication released on Thursday.
Yesterday, the Biden administration asked the US Department of Housing and Urban Development and other federal agencies to extend its moratorium on foreclosures and evictions for single-family mortgages insured by the Federal Housing Administration (FHA) or guaranteed by the Office of Native American Programs’ Sections 184 and 184A loan guarantee programs through March 31, 2021, “HUD said in an action announcement.” Today, HUD executed the ‘one of the administration’s first actions to provide meaningful support to individuals and families across the country who are struggling to make their mortgage payments due to the financial devastation caused by the COVID-19 pandemic. “
The moratorium, first instituted almost a year ago by the Trump administration and more recently expanded at the end of February by the previous administration, prohibits duty officers from initiating or continuing foreclosure and eviction actions related to foreclosure for single-family term and reverse mortgages insured or guaranteed by HUD . The only exception is arrangements secured by legally vacant and abandoned properties.
The HUD also requires mortgage agents to provide up to six months of forbearance when a borrower experiencing financial difficulty due to the continuing effects of the pandemic requests such assistance. An additional six-month forbearance for a borrower requesting an extension is also available.
The ML applies to the FHA term mortgage programs as well as the HECM program, the details of the ML.
“As President Biden has promised, his new administration is quickly responding to the widespread needs of a country in urgent need of meaningful help to begin combating the effects of COVID-19,” the commissioner said by FHA Acting Janet Golrick. “Immediately protecting borrowers with HUD insured or guaranteed mortgages is an important first step in addressing the larger systemic housing challenges that must be overcome. “
This is the fourth time that the moratorium on seizures and evictions has been extended by the HUD, based on the publication of three previous MLs all issued in 2020.
“The HUD encourages borrowers with HUD insured or guaranteed mortgages who can make their mortgage payments to continue doing so,” the department said in its extension announcement. “Those who are struggling financially because of COVID-19 should engage with their mortgage agent – the entity to which they make their monthly mortgage payments. HUD provides post-COVID-19 forbearance loss mitigation options to help borrowers discount their mortgages.
Lily Letter from the mortgagee 2021-03 at the HUD.