White House Extends 2021 Foreclosure Moratorium for One Final Month
In late June, the White House announced it was extending foreclosure moratorium for "one final month" until July 31, 2021.
Published:
Est. Read Time:
A week before they were set to expire, the White House released a statement that it was extending eviction and foreclosure moratoria for “one final month” until July 31, 2021.
It also presented a list of initiatives to prevent COVID-related evictions and foreclosures after the July 31 deadline passes.
While a majority of the efforts are geared toward providing assistance to renters and landlords, the administration included actions to prevent foreclosures on federally-backed mortgages, such as VA, USDA, and FHA (HUD) loans.
The Federal Housing Finance Agency (FHFA) also announced it was extending foreclosure moratorium for single-family homes and the stay on real estate-owned evictions on mortgages backed by Freddie Mac and Fannie Mae until July 31.
What's in this Article?
What does foreclosure moratorium mean for homeowners
Assistance for landlords and renters
“A return to a more stable housing market”
What does foreclosure moratorium mean for homeowners?
Those with mortgages backed by government agencies cannot be foreclosed upon until August 1. According to the White House statement, “HUD, VA, and USDA will take additional steps to prevent foreclosures on mortgages backed by those agencies until borrowers are reviewed for COVID-19 streamlined loss mitigation options that are affordable.”
Borrowers with mortgages owned by Freddie Mac and Fannie Mae will be evaluated for home retention solutions prior to the onset of foreclosure. Freddie Mac and Fannie Mae are Government-Sponsored Enterprises (GSEs) that buy and back mortgages made by private lenders.
Homeowners with government-backed loans may also apply for COVID-related mortgage forbearance — a temporary suspension of payments — until September 30, if they requested initial forbearance by the appropriate deadlines.
The statement concluded by saying, “HUD, VA, and USDA will be announcing additional steps in July to offer borrowers payment reduction options that will enable more homeowners to stay in their homes.”
Assistance for landlords and renters
The extension also applies eviction moratoria to renters in public or private property financed by government-backed loans, such as USDA, HUD/FHA, Fannie Mae, and Freddie Mac. That means landlords financing through government programs may not evict tenants for non-payment of rent without first providing a 30-day notice to vacate.
In addition, the statement included initiatives to assist renters and landlords and called for local governments to increase their efforts in distributing the $46 billion in Emergency Rental Relief (ERA) set aside by recent legislation.
In this initiative, Associate Attorney General Vanita Gupta urged state courts to adopt anti-eviction diversion practices, which encourage landlords and tenants to circumvent legal action and instead access emergency rental assistance to settle late payments. The intent is to have landlords and renters avoid court costs and reduce the backlog on the court system.
“A return to a more stable housing market”
COVID-19 greatly disrupted the housing market for renters, landlords, and homeowners. While the government has provided many months of assistance for those suffering COVID-hardships, it’s now looking ahead to post-pandemic recovery by setting a final deadline for eviction and foreclosure moratoria and putting in place programs to stabilize the housing market when this deadline passes.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.
Fairway is not affiliated with any government agencies. These materials are not from the VA, HUD, FHA, USDA, or RD, and were not approved by a government agency.