The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) will be suspending all foreclosures and evictions for the next 60 days in response to the economic shock renters and homeowners are experiencing due to the outbreak of the COVID-19 coronavirus. This is according to President Donald Trump, who made the announcement at a Wednesday morning press briefing at the White House.
“The Department of Housing and Urban Development is providing immediate relief to renters and homeowners by suspending all foreclosures and evictions until the end of April,” Trump said at the briefing. “So, we’re working very closely with [HUD Secretary] Dr. Ben Carson and everybody from HUD.”
The moratorium applies to all FHA Title II Single Family forward mortgage and Home Equity Conversion Mortgage (HECM) programs, according to a Mortgagee Letter issued after the president’s announcement was made.
“Today’s actions will allow households who have an FHA-insured mortgage to meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns,” said HUD Secretary Ben Carson in a statement after the moratorium’s announcement. “The health and safety of the American people is of the utmost importance to the Department, and the halting of all foreclosure actions and evictions for the next 60 days will provide homeowners with some peace of mind during these trying times.”
The moratorium immediately instructs mortgage servicers to halt all new foreclosure actions, and to suspend all foreclosure actions currently in process; and to cease all evictions of persons from FHA-insured single-family properties.
“This is an uncertain time for many Americans, particularly those who could experience a loss of income,” said FHA Commissioner Brian Montgomery. “As such, we want to provide FHA borrower households with some immediate relief given the current circumstances. Our actions today make it clear where the priority needs to be.”
The measure is designed to alleviate the immediate concerns of tenants and homeowners who may be facing an uncertain future in terms of their employment status. The service industry in particular has been significantly impacted by companies scaling back operations as health authorities recommend “social distancing” as a way to mitigate the spread of the virus, as has the hospitality and travel industries.
Shortly after the moratorium was announced, Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger released a statement in support of the move.
“The actions taken today by HUD and FHFA are timely and an important step in providing assurance to consumers,” Kraninger said. “I commend my colleagues at HUD and FHFA for being proactive on this issue and providing Americans with much needed peace of mind during this uncertain time.”
Earlier in March, Kraninger and the CFPB encouraged financial institutions to make concessions for customers that have been affected by the outbreak. CFPB will continue to work in making sure that financial institutions and creditors are making necessary concessions in times of mass financial hardship for Americans.
“Consumers’ first stop in the face of hardship is with their creditors and their financial institutions, so our message was important for regulated entities to hear,” Kraninger said. “I will continue to work with our Federal and State partners, and seek feedback from stakeholders, to ensure we are providing appropriate flexibilities to benefit consumers during this time.”
The FHA encourages servicers to continue offering its suite of loss mitigation options to distressed borrowers, according to the official announcement of the moratorium.
“[This includes] those that could be impacted by the coronavirus – to help prevent them from going into foreclosure,” the HUD press office said in the announcement. “These include short and long-term forbearance options, mortgage modifications, and other mortgage payment relief options available based on the borrower’s individual circumstances.”
Read the Mortgagee Letter announcing the moratorium.