The Federal Housing Finance Agency (FHFA) has given some homeowners and renters struggling with COVID-related financial issues another month of support, extending the moratoria on both single-family foreclosures and real estate owned (REO) evictions for properties backed or acquired by Fannie Mae and Freddie Mac.
Both moratoria have been extended until Feb. 28. Before this week, they were set to end on Jan. 31; it’s the fifth time the FHFA has pushed their expiry back from their original sunset date of June last year.
“To keep our communities safe, and families in their homes during the COVID-19 pandemic, FHFA is extending Fannie Mae and Freddie Mac’s foreclosure and eviction moratorium,” said FHFA Director Mark Calabria in a short statement.
The moratorium on foreclosures applies to single-family mortgages backed by the two government-sponsored enterprises (GSEs). The eviction moratorium applies to properties that have been acquired by the GSEs via foreclosure or deed-in-lieu foreclosure.
The FHFA’s GSE moratorium is separate from the national eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) that was extended by Congress until Jan. 31. It is also separate from the moratorium on evictions and foreclosures issued by the Department of Housing and Urban Development (HUD) that expires on Feb. 28.
Such suspensions have so far kept Americans sheltered and prevented elevated foreclosure and eviction rates despite the economic havoc caused by the COVID-19 crisis. Attom Data Solutions reported last week that 2020 saw the lowest level of foreclosure filings since it began tracking the statistic in 2005.
“The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties. … While it’s still highly unlikely that we’ll see another wave of foreclosures like the one we had during the Great Recession, we really won’t know how big that backlog is until after the government programs expire,” said Rick Sharga, executive vice president of Attom subsidiary RealtyTrac.
To further protect Americans as the country continues to recover, President-elect Joe Biden recently proposed that lawmakers extend the pauses on evictions and foreclosures until Sept. 30 as part of a $1.9 trillion COVID-19 relief plan.
The ongoing moratoria, however, haven’t been without financial impact themselves. The FHFA estimates that the GSEs will garner additional expenses of $1.4 billion to $2 billion to the foreclosure moratorium and its extension. Meanwhile, Moody’s Analytics has estimated that back rent debt grew to $70 billion by the end of 2020.
For its part, the FHFA announced that will it continue to monitor the impacts of the moratoria on the GSEs, borrowers and the market as a whole, and that it will extend or sunset its policies based on data and health risk.