FHFA Extends Foreclosure and Eviction Moratoriums, Maximum Forbearance Term, and Origination Flexibilities

Ballard Spahr LLP

Ballard Spahr LLP

The Federal Housing Finance Agency (FHFA) announced February 9, 2021, the extension of the Fannie Mae and Freddie Mac moratorium on single family foreclosures from February 28, 2021, to March 31, 2021.  The moratorium on evictions from single family homes owned by Fannie Mae or Freddie Mac also is extended until March 31, 2021. The announcement does not address evictions from multi-family properties subject to a Fannie Mae or Freddie Mac loan. 

FHFA also announced that qualifying borrowers with Fannie Mae and Freddie Mac mortgages who are reaching the end of the 12-month maximum forbearance term under the CARES Act can receive an additional forbearance extension of up to three months, providing for up to 15 months of missed payments.

Fannie Mae addresses the foreclosure moratorium extension and forbearance term extension in an update to Lender Letter 2021-02, and Freddie Mac addresses the foreclosure moratorium extension and forbearance term extension in Bulletin 2021-6. With regard to the foreclosure moratorium, both Fannie Mae and Freddie Mac advise that the moratorium does not apply to properties determined to be vacant or abandoned. With regard to the forbearance term extension, both Fannie Mae and Freddie Mac advise that the servicer must establish a Qualified Right Party Contact to evaluate the borrower for an extension. Freddie Mac also addresses revisions to the COVID-19 payment deferral, and Fannie Mae does so in Lender Letter 2021-07.

On February 10, 2021, FHFA announced the extension of COVID-19-related loan origination flexibilities from February 28, 2021, to March 31, 2021. The flexibilities relate to alternative appraisals on purchase and certain refinance loans, alternative methods for verifying employment before closing, and the expanded use of powers of attorney to assist with loan closings. Fannie Mae addresses the extension in updates to Lender Letter 2021-03 and Lender Letter 2021-04. Freddie Mac addresses the extension in Bulletin 2021-7.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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