Many homeowners have been praying to read the headline “foreclosure and eviction moratorium extended”. They’re panicking as they face eviction and foreclosure in the aftermath of COVID-19, and fortunately for some, their prayers have been answered. Just how much of an “answer” this third extension turns out to be, though, remains to be seen.

Foreclosure and Eviction Moratorium Extended: What It Means For You

Four days before it was set to expire, the Federal Housing Finance Agency announced the extension of the foreclosure and eviction moratorium for borrowers who have their mortgages backed by Fannie Mae and Freddie Mac. FHFA director Mark Calabria says that the most recent extension of the moratorium will protect more than 28 million homeowners who have their mortgage backed by Fannie Mae or Freddie Mac – a necessary step with so many people suffering financially as a result of COVID-19. There are a few provisos, however…

The foreclosure moratorium on Fannie Mae and Freddie Mac mortgages only applies to enterprise-backed, single-family mortgages only.

And…

The REO eviction moratorium only applies to properties that have been acquired by an enterprise through foreclosure or deed-in-lieu of foreclosure transactions.

Something else you should know – according to Fannie Mae and Freddie Mac, the suspension does not apply to tenants currently in homes that have not yet been foreclosed.

So what does the FHFA recommend for those homeowners who don’t meet the criteria for the extension? Nothing new. They advise that these individuals consult with their lenders and explain their situation as soon as they can. They also remind homeowners who have been impacted by COVID-19 that they are eligible for a forbearance plan which can reduce or suspend mortgage payments for up to 12 months, as mandated by the CARES Act.

How Bad Is it?

Just how bad is it out there? Well, if you’re one of the many struggling with mortgage payments that are more than 90 days past due, you’re certainly not alone. Data from Black Knight states that the number of mortgage payments 90 days or more past due hit a ten year high in July.

But Wait…There’s More

The FHFA also announced that Fannie Mae and Freddie Mac would be extending their forbearance loan purchase program until September 30th. What does this mean? It means that they will continue buying QUALIFIED loans in forbearance up until September 30th.

But What About the Rest?

But what about the rest of the homeowners out there who are struggling? Again comes the cry to speak with your lender. Your lender who is juggling their own financial obligations. It’s a vicious cycle of money owed and with the continuing and projected COVID-19 crisis we have to wonder what’s next…

There are those who are ineligible to refinance. There are lenders who cannot afford to assist with leniency. There are families who are scraping by and families who are so far past scraping by that it’s incomprehensible. And while federally backed mortgages are “safe” for now, January 1st isn’t that far away and COVID-19 numbers are only expected to worsen during the winter months. So what happens when January 1st arrives? What happens in the meantime to all of those families who are falling through the gaps?

They Have to Do What They Have to Do

We might think…or at least hope that our law enforcement officers would be reluctant to follow through with eviction orders and lenders would be reluctant to follow through with foreclosures, but the truth of it is that they have a job to do too and they have to answer to someone. Failure to answer to that someone is only going to perch them at the top of the landslide and let them slowly fall into the pile of foreclosures and evictions themselves.

But then again…how far can we push these “worker bees” to continue this dirty work when day after day they’re turning families out onto the streets with the psychological stress of that job becoming unbearable?

So where do we go from here? What is the answer?

How do we protect each other as we attempt to hold some sort of economic structure together?

What Are Your Thoughts on The Extension?

What are your thoughts on the extension of the eviction moratorium by Fannie Mae and Freddie Mac? Should the moratorium be extended for all homeowners? What do you think the fallout will be come January 1st? Leave a comment and share your thoughts below!

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