Advertisement
HUD Announces Additional Relief for FHA-Insured Mortgagees
The U.S. Department of Housing and Urban Development has announced a tailored set of mortgage payment relief options for single family homeowners with FHA-insured mortgages who are experiencing financial hardship as a result of the COVID-19 pandemic.
For borrowers with a financial hardship that makes them unable to pay their mortgage due to COVID-19, mortgage servicers must extend deferred or reduced payment options for up to six months, and must provide an additional six months of forbearance if requested by the borrower. This mandate implements provisions contained in the Coronavirus Aid, Relief and Economic Security Act (CARES Act) which President Trump signed into law this past weekend.
“The last thing any of us wants is for Americans to lose their homes unnecessarily while we continue to fight this invisible enemy,” said HUD Secretary Ben Carson. “If you’re struggling, immediate help is now available. The FHA will continue to work with stakeholders to ensure that the loss mitigation options that are offered for both forward and reverse borrowers are appropriately tailored for the present situation.”
In addition to special COVID-19 forbearance, FHA also implemented the COVID-19 National Emergency Partial Claim, an option to be used by servicers when the COVID-19 forbearance period ends. This partial claim will help eligible homeowners who have been granted special COVID-19 National Emergency forbearance to reinstate their loans by authorizing servicers to advance funds on behalf of homeowners. The partial claim will defer the repayment of those advances through an interest-free subordinate mortgage that the borrower does not have to pay off until their first mortgage is paid off.
The FHA has also instructed mortgage servicers to:
►Delay submitting Due and Payable requests for Home Equity Conversion Mortgages (HECMs) by six months, with an additional six-month delay available with HUD approval; and
►Extend any flexibility they may have under the Fair Credit Reporting Act relative to negative credit reporting actions.
►Delay submitting Due and Payable requests for Home Equity Conversion Mortgages (HECMs) by six months, with an additional six-month delay available with HUD approval; and
►Extend any flexibility they may have under the Fair Credit Reporting Act relative to negative credit reporting actions.
“For American families impacted by the COVID-19 virus and unable to pay their FHA-insured mortgage, imminently losing their homes is now one less fear they should have,” said Assistant Secretary for Housing and Federal Housing Commissioner Brian Montgomery. “Today’s actions will ease the immediate pressures faced by many Americans who, through no fault of their own, are struggling with financial uncertainty.”
About the author