The Federal Housing Finance Authority (FHFA) and Department of Housing and Urban Development (HUD) announced today it will extend its foreclosure and eviction moratorium through the end of 2020.
The announcement comes 19 days after President Donald Trump signed an executive order calling on the Department of Health and Human Services and the Centers for Disease Control and Prevention to consider whether an additional eviction ban is needed.
Details on the Extension
The foreclosure and eviction moratorium has been in effect since March 18, 2020, and will benefit 28 million homeowners who have mortgages guaranteed by Fannie Mae and Freddie Mac, according to a press release from the FHFA.
Under the moratorium, direct mortgage servicers are required to halt all new foreclosure actions and suspend any that are in process for FHA-insured single-family properties. It also stops evictions from these properties.
Servicers are also required to continue to offer mortgage forbearance when a homeowner with a FHA-insured mortgage requests it, with the option to extend forbearance for up to a year. A lump sum payment will not be required at the end of the forbearance period.
“Because homeownership is the largest wealth builder for the majority of the nation’s families, providing relief from foreclosure and eviction to those who are in jeopardy of losing their hard-earned wealth, through no fault of their own, is a priority,” HUD Secretary Ben Carson said in a separate press release.
The moratorium does not apply to private mortgages. However, some lenders have offered their own forbearance periods.
Advocates Say More Needs to Be Done
Advocates are still calling for more housing relief for Americans, despite the new extension of the foreclosure and eviction moratorium.
The National Housing Conference, a nonpartisan nonprofit organization that calls for equitable housing in the U.S., is calling on lawmakers to extend relief to an estimated 30-40 million renters who are largely left out of a federally mandated form of relief but are at risk of eviction.
“NHC appreciates FHFA and HUD’s work to keep individuals and families in their homes during this unprecedented time, but recognizes the overdue need for congressional action to support struggling renter households,” said NHC president and CEO David M. Dworkin in a written statement.
Thirty-one housing organizations sent a letter to Congress on August 21, asking for the next stimulus package to protect both property owners and renters.
“Renters impacted by the COVID-19 pandemic already owe an estimated $25 billion in back rent and could owe up to $70 billion by the end of the year,” reads the letter. “Without federal rental assistance, these debts will be unsustainable and financially ruinous for renter households across the nation. Failure to act will put tens of millions of renters at risk of being evicted, undermine the stability of our rental housing system, and needlessly prolong our nation’s ability to fully recover from the economic damage that has been wrought by this pandemic.”
But leaders in Washington are still in a stalemate over the next coronavirus relief package.
House Democrats voted on and passed its $3 trillion HEROES Act in May, which would provide $175 billion in rent and mortgage assistance. The bill has fallen flat in the Senate, but remains a focal point for Speaker of the House Nancy Pelosi (D-CA) during negotiations. Senate Republicans introduced their own proposal for the next stimulus package, the HEALS Act, as a series of smaller bills in the beginning of August.
Little progress, however, has been made toward compromising on what should be included in another coronavirus relief package, so neither proposal has been signed into law.