FHA agrees to Extend Foreclosure/Eviction Ban Nationwide
HUD announced today that the government department will extend the ban on all evictions and foreclosures until the end of the year 2020. And what a crazy year that it is. This means that all mortgages backed by HUD like FHA(Federal Housing Authority) will stop all foreclosure activity and eviction litigation to those already foreclosed upon and residing in the foreclosed property. This is welcome news for those struggling financially right now. However this policy will only affect a very limited group of the public. This will likely only affect the people that were behind on their mortgages BEFORE the pandemic started(prior to Feb 2020.) You see in order to foreclosure you must be many many months behind on your mortgage so this will prevent foreclosures and evictions for people that are over 12 months behind( Prior to the Pandemic.)
The policy/ban only covers the approx. 8.1 million homeowners with single-family mortgages insured by the FHA, the HUD agency that backs low- and moderate-income borrowers' loans. This ban does NOT affect those backed/owned by the largest mortgage holders Fannie Mae and Freddie Mac, This means that the extension involves much fewer homes than did the four-month eviction moratorium included in the CARES Act, which lapsed at the end of last month.
“The Trump administration is looking at using authorities within its jurisdiction to extend relief through the calendar year for Americans experiencing financial hardship due to the coronavirus, which includes existing funds as well as moratoriums on foreclosures and evictions,” states a person familiar with the administration.
Most experts agree that this banaction does not do enough to protect homeowners, because of the small percentage of households it will help.