A moratorium on all foreclosures and evictions in connection with the national emergency stemming from the COVID-19 coronavirus pandemic has been extended through August 31, according to a Mortgagee Letter (ML) released Wednesday morning by the U.S. Department of Housing and Urban Development.
The moratorium — initially declared by President Donald Trump in a March news conference before being codified in an ML shortly thereafter — applies to all FHA-insured single family mortgages covered under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for an additional period beyond a first extension, which was set to expire at the end of June.
The moratorium directs all mortgage servicers to halt all new foreclosure actions and suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties; as well as to cease all evictions of persons from FHA-insured single family properties, excluding actions to evict occupants of legally vacant or abandoned properties.
The application to existing reverse mortgage borrowers is immediate and does not require an affected borrower to take any additional steps to avail themselves of the moratorium, according to a HUD spokesperson who spoke with RMD.
“The foreclosure and eviction moratorium applies to all homeowners with mortgages insured under FHA’s Title II programs, including seniors with Home Equity Conversion Mortgages (HECMs), as long as the property is not vacant or abandoned,” the spokesperson said. “This is a blanket moratorium, and does not require borrowers to take any action to benefit from the moratorium.“
Reverse mortgage servicers expressed support for the moratorium to RMD when it was initially handed down, and this latest extension is not unanticipated considering that the effects of the pandemic are now more fully understood. This is according to Leslie Flynne, SVP at Reverse Mortgage Solutions (RMS).
“[News of this extension] is not a surprise as the consequences of the COVID-19 pandemic are more profound than originally estimated,” Flynn tells RMD in an email. “Let’s hope that with increasing reported cases in numerous states, regional extensions will not be warranted in the future.”
HUD Secretary Dr. Ben Carson shared that while the economic recovery is showing signs of forward momentum, some families require additional relief as they find their way back to economic stability.
“While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” said Carson in a statement announcing the extension. “Our foreclosure and eviction extension means that these families will not have to worry about losing their home as they work to recover from the financial impacts of COVID-19.”
This extension also stands as further proof of the extensive steps being taken by the Department to respond to the economic shock stemming from the pandemic, according to Acting FHA Commissioner Len Wolfson.
“FHA is committed to working with borrowers impacted by COVID-19 and this second extension of the foreclosure and eviction moratorium is another sign of the unprecedented steps HUD is taking to assist those impacted by this terrible pandemic,” said Wolfson in a statement.
Read Mortgagee Letter 2020-19.