Biden administration unveils new aid to prevent foreclosure spike
July 23, 2021
The Biden administration on Friday unveiled new loan modification options for homeowners with government-backed mortgages, in a bid to stave off a surge in foreclosures as borrowers struggle to pay their bills during the pandemic.
The White House announced the plans as other homeowner protections were set to expire in the coming weeks and months. A federal ban on foreclosures is set to end July 31. A separate program that allows homeowners with mortgages guaranteed by Fannie Mae and Freddie Mac to delay payments through forbearance lasts until Sept. 30.
The new White House programs would allow homeowners hurt by the pandemic-driven economic downturn to extend the life of their mortgages with lower monthly payments.
The Biden administration said about 1.8 million Americans remain in forbearance today, more than a year after emergency safeguards were put in place to give homeowners the choice to suspend mortgage payments during the Covid-19 crisis.
The three government agencies that back mortgages — the Departments of Housing and Urban Development, Veterans Affairs and Agriculture — will offer new loss-mitigation options and tools intended to reduce borrowers’ monthly principal and interest payments by about 25 percent, according to a White House fact sheet. The changes bring the agencies in line with the options already offered to borrowers with mortgages backed by mortgage finance giants Fannie and Freddie.
HUD, USDA and the VA also announced that borrowers who have not suspended payments to date can still enter into a forbearance program through Sept. 30.
More than 7 million households took advantage of forbearance programs at some point over the last 16 months. Borrowers with federally guaranteed mortgages can take advantage of the aid for up to 18 months.
Source: https://www.politico.com/
