HUD Announces Extended Foreclosure Moratorium
HUD has announced a variety of measures designed to help borrowers financially affected by COVID-19; in March of 2020 an eviction and foreclosure moratorium was initiated for those with FHA home loans who needed the help. The original deadline was passed, extended, and re-extended.
At one stage, the agency announced, "HUD’s foreclosure moratorium is set to expire on July 31, 2021, and HUD is not extending that moratorium further."
That would have been the final word, except that in the meantime, a similar moratorium on rental evictions was allowed to expire with no extension, creating a potential critical mass of evictions that, if they are allowed to occur, happen in the midst of a massive public health crisis caused by COVID-19.
The expiration of that moratorium led to a great deal of protest; in response, the Biden administration has announced it would review options to help; among those options is this further extension of the foreclosure moratorium for mortgage servicers who issue loans guaranteed by the Federal Housing Administration.
In a press release issued by HUD, the agency explains that the moratorium's extension is intended to help, "avoid displacement of severely distressed borrowers and allow them time to access suitable housing options after foreclosure".
The Department of Housing and Urban Development also feel the moratorium is meant to "provide Borrowers additional time to access federal, state, or local housing stability resources or to consult with HUD-certified housing counselors".
Borrowers who get into trouble with their mortgages have many options if they act quickly enough. If you request loan forbearance or loan modification before you have missed a single payment, you may have more options open to you compared to those who miss more payments before they contact the lender to request loan assistance due to financial hardship.
The moment you know you may have trouble making your payments, contact a lender. It doesn't matter whether you know how long your financial troubles might last, short or long-term, it is best to contact your loan servicer to make arrangements to save your home through FHA loan forbearance, loan modification, etc.
Some won't be able to save their homes and will experience the full foreclosure and eviction process once the moratorium is lifted. These homeowners should use their remaining time to find housing alternatives and prepare for the process to begin. Others may still have time to avoid losing their home--for these borrowers communication and coordination with the loan servicer will be key.
The Department of Housing and Urban Development has extended its moratorium on foreclosures and foreclosure-related evictions until September 30, 2021.
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