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The Biden government announced on Tuesday the extension of the federal bans on mortgage forbearance and foreclosure programs through June, thus offering relief to thousands of homeowners struggling with finances due to the pandemic.
This action has extended the foreclosure moratorium period for homeowners having federally backed loans.
It has also extended the time frame to request mortgage forbearance until the end of June, allowing homeowners to reduce their mortgage payments or defer them.
The forbearance period is also extended, allowing borrowers who went into forbearance on (or before) the 30th of June 2020, an extra 6 months.
Most of the protections that were set up last spring were going to expire next month, which would have put many homeowners at the risk of losing their homes or falling more into debt.
The relief is a coordinated effort between the Department of Veterans Affairs, Department of Agriculture, and The Department of Housing and Urban Development.
The Federal Housing Finance Agency also extended the forbearance period for homeowners by 3 months and extended the ban on foreclosure until March-end.
These actions together will cover about 70% of the current single-family home mortgages.
The additional forbearance of six months, which will be available in increments of three months indicates there is an expectation of long-term unemployment continuing to be an issue even after the pandemic is over and the country and economy slowly start reopening.
The extension of the possibility of entering forbearance till 30th June is going to be highly beneficial to people that are likely to lose their jobs in the coming months.
The government is integrating the information about its relief programs via the Consumer Financial Protection Bureau and has said that it aims to benefit the 2.7 million homeowners that are currently in forbearance along with extending the relief options at disposal of the homeowners for nearly 11 million government-backed mortgages across the country.
The government still thinks there is a need for more assistance, particularly for borrowers and homeowners working with private lenders.
Reference Source: CNN
