Mortgage news

Mortgage Relief Extended Another 6 Months

If you're struggling to pay your mortgage, find out if you're eligible for extra relief.

Mortgage Relief Extended Another 6 Months

    As the latest Covid-19 relief bill gets hammered out in Congress, it was announced recently that the President ordered a 6 month extension for mortgage forbearance and foreclosure relief programs.

    In a briefing statement from the White House, it was explained that the forbearance and foreclosure protections that were set to expire in March 2021, will now be extended through June 2021.

    President Biden’s order applies directly to The Department of Housing and Urban Development, The Department of Agriculture and The Department of Veteran’s Affairs.

    The directive requires federal housing regulators to take the specific actions outlined below:

    • Keep the foreclosures ban in place throughout June of this year.
    • Prolong the deadline for consumers to enroll in mortgage payment forbearance until the end of June 2021.
    • Continue forbearance programs for the next 180 days for individuals who enrolled in mortgage payment programs prior to June 30, 2020. This extension must be requested by the homeowner every 90 days.

    Fannie Mae and Freddie Mac

    Following Biden’s lead, the Federal Housing Finance Agency that oversees Fannie Mae and Freddie Mac also extended their forbearance and foreclosure programs. Their new terms are similar to the directives issued by the President, as they will halt foreclosures of single-family residences and suspend real estate owned evictions throughout March 2021.

    Consumers holding Freddie Mac or Fannie Mae mortgages who were already in a Covid-19 forbearance program as of February of this year automatically qualify for another three months of mortgage payment deferral.

    Therefore, individuals with federally backed mortgages of this kind can now defer up to 15 months of payments, according to the Federal Housing Finance Agency.

    Loan Origination Flexibilities Also Extended

    Additionally, the FHFA has extended a series of loan flexibility programs in order to loosen restrictions on borrowers during the uncertainty of COVID-19. The flexibilities were previously set to expire at the end of February, but will not extend through the end of March.

    The loosened restrictions include the ability to use alternative documentation for employment verifications, alternative appraisal options for refinance loans, and an expansion of the use of power of attorney to help with loan closings.

    Who Qualifies for Mortgage Relief?

    Loans made by the following federal agencies qualify for relief:

    • Fannie Mae
    • Freddie Mac
    • Department of Veterans Affairs
    • Department of Agriculture
    • Department of Housing and Urban Development
    • Federal Housing Administration

    The CARES Act initially provided for approximately one year of deferred mortgage payments for consumers who have loans backed by federal agencies.

    Privately held mortgages, such as those held by banks, are not included in the aforementioned relief plans. However, the relief package proposed by the President would include a $10 million Homeowners Assistant Fund that would let states assist homeowners with utility costs and mortgage payments.

    According to an estimate from Mortgage Bankers Association, approximately 2.7 million homeowners have enrolled in forbearance plans as of February 2021, most of which are held by private lenders, rather than federal agencies.

    Learn More About Your Mortgage Relief Options

    We recently wrote an entire article regarding what you should do if you need mortgage relief.

    However, the Biden administration has put together a resource for housing assistance so that struggling Americans can get the housing help that they need in one centralized location.