March 19, 2020
The Department of Housing and Urban Development is providing FHA borrowers a 60-day foreclosure moratorium described as “immediate relief” for those who may be struggling to make FHA mortgage loan payments during the health crisis.
Details From HUD
The HUD official site has published details of the HUD-mandated moratorium on all foreclosures on FHA Single-Family home loans and Reverse Mortgages, a move similar to what happens to borrowers in federally-declared disaster areas after a natural disaster such as a hurricane, flood, forest fire, landslide, etc.
FHA Mortgage Foreclosure Evictions Also Suspended
The HUD foreclosure moratorium announcement includes a suspension of evictions related to those foreclosures, also for sixty days. The eviction process suspension is a critical part of foreclosure relief for some borrowers.
The HUD official site’s press release addresses the financial stress the outbreak has placed on the American economy in general.
The HUD Secretary is quoted in the release, saying the moratorium is designed to help homeowners “…meet the challenges of COVID-19 without fear of losing their homes, and help steady market concerns…”
What You Need To Know About The FHA Foreclosure And Eviction Moratorium
The announcement published on the HUD official site applies specifically to all FHA Single-Family home loans under the Title II program, but also to those with Home Equity Conversion Mortgages (FHA HECM loans) also known as FHA Reverse Mortgages.
FHA loan servicers are directed by HUD to stop all new foreclosure actions for sixty days, suspend all in-progress foreclosure actions, and prevent or stop evictions from FHA-insured single-family homes.
FHA Loan Options If You Are In Trouble With Your Mortgage
This foreclosure moratorium applies only to FHA Single-Family home loans and reverse mortgages (AKS FHA HECM loans). Other government-backed loan programs will issue guidance based on their own plans and policies during this national emergency.
The FHA and HUD cannot compel lenders to offer a full complement of loss mitigation and foreclosure prevention options, but it does strongly encourage such measures including:
- Short-term refinancing
- Long-term FHA loan forbearance
- Mortgage loan modification
Act Today And Do Not Delay
Ask your lender what options are available to you as soon as you know you need help. Missing or anticipating missing even a single mortgage payment is enough to warrant quick action on your part. DO NOT DELAY.
The sooner you contact your loan officer once you experience financial hardship, the better your options for avoiding foreclosure. The longer you wait, the fewer options for loan modification or forbearance you have. Your lender can work with you, but communication is key.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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