The ban ends July 31, and over 1.5M homeowners remain delinquent on their mortgage. But the Consumer Financial Protection Bureau offers info about possible relief options.
WASHINGTON – The foreclosure moratorium on federally backed mortgages, which was initiated at the start of the pandemic, will expire on July 31. More than 1.5 million homeowners remain seriously delinquent on their mortgage, meaning they haven’t made a payment in at least 90 days, according to Black Knight data. That equates to about 2.9% of U.S. mortgage holders.
The White House recently announced additional actions to help struggling homeowners avoid foreclosure when they emerge from mortgage forbearance. Borrowers with federally backed loans – including FHA, FHFA, VA, and USDA loans – can extend the length of their mortgages and lock in lower interest rates. The Department of Housing and Urban Development (HUD) will offer lenders the ability to provide all eligible borrowers with a 25% principal and interest reduction. The Biden administration said in a release that it believes the additional payment reduction will result in fewer foreclosures.
Pandemic-related forbearance moratoriums have allowed some homeowners to defer their mortgage payments for up to 18 months. The extra aid for homeowners coming out of forbearance is “an important additional step to give people the opportunity to stay in their homes after they had a hardship during the pandemic,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association.
The Consumer Financial Protection Bureau has restricted mortgage lenders from foreclosing on a property this year without contacting the homeowner first to determine if they qualify for a loan modification or a lower interest rate. The CFPB also maintains a page outlining relief options and deadlines. About 75% of home loans are backed by the federal government, according to the Urban Institute.
Source: “New Aid Coming for Mortgage Borrowers at Risk of Foreclosure,” The Wall Street Journal (July 23, 2021) [Log-in required.] and Whitehouse.gov
© Copyright 2021 INFORMATION, INC. Bethesda, MD (301) 215-4688
Go to Source