Helping hand from Freddie Mac and Fannie Mae

Due to the spread of the Novel Coronavirus, Freddie Mac in March announced that it was taking the necessary actions to protect the people affected, directly or indirectly by the virus. Specifically, Freddie Mac targeted the singlefamily business, where it announced a nationwide suspension for all the foreclosures sales and evictions of the borrowers living in homes owned by the company. Freddie Mac also announced that to include a variety of additional mortgage relief options, which includes an expansion of its forbearance program, to incorporate additionally impacted borrowers. This comes at a very great time when homeowners and the renters who are reeling under financial effects will have fears of losing their homes to foreclosures or being evicted during the public health crisis.

The president announced that the Department of Housing and Urban Development is suspending all the foreclosures and evictions until the end of April. HUD later stated its official stand, stating that the Federal Housing Administration was enacting an “immediate foreclosure and eviction moratorium for single-family homeowners with FHA-insured mortgages” which would hold for the next 6o days.

“This foreclosure and eviction suspension allow homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency,” FHFA Director Mark Calabria said in a statement.

Given that Freddie Mac and Fannie Mae are the largest mortgage financiers in the country, the move is a significant one and bears a huge impact.

“As a reminder, borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible,” Calabria added. “The Enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.”

“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,” HUD Secretary Ben Carson said. “The health and safety of the American people are 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.”

According to the directive by HUD, all the mortgage servicers are required to “halt all new foreclosure actions and suspend all foreclosure actions currently in process; and cease all evictions of persons from FHA-insured single-family properties.”

In 2018 alone, Fannie Mae and Freddie Mac accounted for an upward of about 46% of all the mortgages originated, while the Federal Housing Administration and the Veteran Affairs backed loans accounted for almost 23% of all the new mortgages. This means that the majority of homeowners with a mortgage will be safe from the foreclosures or the evictions as a result of the policy by the HUD and the FHFA.

In the announcement, Calabria also noted that the “borrowers affected by the coronavirus who are having difficulty paying their mortgage should reach out to their mortgage servicers as soon as possible.”

“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 during the press conference. “We’re working very closely with [HUD Secretary] Dr Ben Carson and everyone at HUD.”

The directive on the evictions and the foreclosures that the president announced will apply to homeowners who have FHA loans and all the homeowners with the loans backed by FHA will be eligible. The HUD secretary announced that HUD was already working with Congress to acquire authority to prevent the evictions for the people in public housing. “HUD has been in contact with every Public Housing Agency in the country to ensure the millions of lowincome Americans we serve continue to have a roof over their head,” Carson wrote on Twitter.

The Department also recommended that the owners of the public-housing projects should “work with impacted residents and families to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents,” however, the department noted that no additional support in terms of finances had been made available to assist in that effort. Advocates have come out arguing that this is a good move by the federal government as more Americans had their incomes and finances disrupted as a result of the outbreak. If we can avoid evictions in such a time. It would great outcomes even in term of health for the people.

“This pandemic is a stark reminder that housing is health care,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “Policy makers at all levels should immediately implement moratoriums on foreclosures and evictions.” Even before these announcements, many cities all across the country, including the New York and San Jose had begun to issue a temporal moratorium on evictions during the pandemic. The moves were largely supported by large industry groups including the Real Estate Board of New York and the National Apartment Association and the National Multifamily Housing Council.

https://freddiemac.gcs-web.com/news-releases/newsrelease-details/freddie-mac-announces-enhancedrelief-borrowers-impacted-covid https://www.marketwatch.com/story/somehomeowners-and-renters-will-get-a-break-from-thecoronavirus-financial-fallout-2020-03-18 https://www.housingwire.com/articles/fannie-maefreddie-mac-hud-suspending-all-foreclosures-andevictions/