FHA Extends Eviction Moratorium For Foreclosed Mortgage Debtors
Extending an eviction moratorium for excluded borrowers can help.
The Federal Housing Administration (FHA) today announced an extension of its moratorium on evictions for foreclosed borrowers and their residents through Jan.
The extension is part of President Biden’s July 29 announcement that federal agencies will use their powers to extend their respective eviction moratoriums through September, which will continue to protect households living in state-insured single-family homes.
The extension of the FHA’s eviction moratorium will prevent the eviction of foreclosed borrowers and other residents who may need more time to access suitable housing after the foreclosure.
“We must continue to do everything in our power to ensure that foreclosed borrowers affected by the pandemic have the time and resources to secure safe and stable housing, whether in their current homes or through obtaining alternative housing, ”said Lopa Kolluri, deputy assistant secretary for housing. “We don’t want individuals or families to be unnecessarily displaced while trying to recover from the pandemic.”
With today’s announcement, mortgage servants must continue to halt evictions on FHA Single Family Title II Forward and Home Equity Conversion Mortgage (HECM) properties, with the exception of properties that are legally vacant or abandoned.
An FHA forward mortgage allows a borrower to apply for funds to purchase the home, with options to finance the mortgage insurance premium upfront and, if necessary, certain approved adjustments required by the appraiser.
Mortgage servants may initiate or continue foreclosures in accordance with FHA requirements once the moratorium on single-family foreclosures expires on July 31, 2021 as planned, but will not be allowed to evict a foreclosed borrower or other resident.
The FHA urges those who are behind with their mortgage payments or are having difficulty meeting the terms of their reverse mortgage or home conversion mortgage to do so immediately.
By contacting their servicer, borrowers can obtain a mortgage deferral or HECM extension. For FHA forward mortgages, the FHA also urges borrowers to contact their mortgage administrator if their administrator tells them about the new Covid-19 Advance Loan Modification or how to update their mortgage , contacted. As part of the Covid-19 ALM program, eligible borrowers receive a reduction in the principal and interest portion of their monthly mortgage payment by at least 25%.
Borrowers looking for more information about the options available to them should also consider contacting a HUD-approved housing counseling center.