Investor Update
June 25, 2021
Source: USDA
Additional Resource:
USDA (SFHGLP Temporary Exceptions in Relation to COVID-19)
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HUD: More Measures to Help Homeowners Struggling Due to COVID-19
Investor Update
June 25, 2021
Source: HUD
WASHINGTON – The Federal Housing Administration (FHA) on Friday announced more measures to help homeowners with FHA-insured mortgages who are struggling financially due to the COVID-19 pandemic. These measures will provide additional, immediate relief while also expanding outreach and home retention options for struggling homeowners who are disproportionately people of color.
“Since President Biden took office, COVID-19 cases and deaths are down by nearly 90 percent, and the economy is rebounding strongly,” said Housing and Urban Development Secretary Marcia L. Fudge. “Importantly, we must continue to take action to ensure that those who may have experienced hardships brought on by COVID-19 have the support they need to remain in their homes. I am pleased that FHA is implementing additional measures to meet this unprecedented challenge and ensure a fair and equitable recovery.”
“These measures are important steps we need to take to ensure that the individuals and families that continue to struggle financially due to COVID-19 have access to effective and meaningful recovery options,” said Principal Deputy Assistant Secretary for the Federal Housing Administration Lopa Kolluri. “We will continue to assess additional solutions to help homeowners in distress keep their homes and avoid future foreclosure where possible.”
Extended Single Family Foreclosure and Eviction Moratoria
In conjunction with the Biden-Harris Administration and other federal agencies, FHA is extending its foreclosure and eviction moratoria for all FHA-insured single family mortgages, except vacant or abandoned properties, through July 31, 2021. This automatic extension is a one-month additional safeguard for those who are struggling to remain in their homes as the nation transitions from relief to recovery.
Further, FHA is continuing its extension of the deadline for first legal action and reasonable diligence timeframes for 180 days after July 31, 2021, to provide servicers with the additional time needed to focus their work on assisting distressed homeowners. This extension excludes vacant or abandoned properties.
Extended COVID-19 Forbearance Request Timeframes
To assist homeowners who remain at risk of falling behind on their mortgage payments due to COVID-19, FHA is extending the time period for homeowners to start new forbearance plans to September 30, 2021. Homeowners who have not previously been in COVID-19 forbearance can request this pause or reduction in mortgage payments. The COVID-19 Forbearance for homeowners who newly request forbearance assistance between July 1, 2021, and September 30, 2021, is for six months.
For homeowners who received a forbearance from their mortgage servicer between July 1, 2020, and September 30, 2020, FHA is providing one additional three-month forbearance extension for those who need and request additional time to recover financially before resuming mortgage payments.
COVID-19 Advance Loan Modification
FHA is also introducing a new home retention option, the COVID-19 Advance Loan Modification (COVID-19 ALM). The COVID-19 ALM will offer significant payment relief to eligible homeowners.
The COVID-19 ALM will be offered to borrowers currently 90 or more days delinquent or at the end of their COVID-19 Forbearance. This new home retention option is for those homeowners whom a 30-year rate and term mortgage modification will bring the mortgage current and will reduce the Principal and Interest portion of their monthly mortgage payment by at least 25 percent.
Mortgage servicers must review their FHA servicing portfolio and offer the new COVID-19 ALM to distressed homeowners with FHA-insured mortgages who have faced a COVID-19 related hardship. To accept the modification, borrowers need to only sign and return the mortgage modification documents to their mortgage servicer.
All loss mitigation options will remain available to borrowers that do not accept the COVID-19 ALM for any reason. Borrowers who cannot make the modified mortgage payments with the COVID-19 ALM or who have other questions should reach out to their mortgage servicer to learn about other options that are available to them.
Home Equity Conversion Mortgage COVID-19 Extensions
To assist seniors with Home Equity Conversion (reverse) Mortgages (HECMs) who have been negatively affected by COVID-19, FHA is extending the ability for these homeowners to request an extension before the servicer may request the loan be called due and payable. For extension requests received between July 1, 2021, and September 30, 2021, servicers must grant homeowners an extension of up to six months.
For HECM homeowners with loans that have already been called due and payable, servicers must approve homeowner requests for an extension for any deadline related to foreclosure and claim submission of up to six months when the request is received between July 1, 2021, and September 30, 2021.
For all HECMs that received an extension between July 1, 2020, and September 30, 2020, FHA is providing one additional three-month extension period if needed, when the homeowner requests this extension from their mortgage servicer.
Homeowners Seeking Assistance
FHA urges those who are behind on their mortgage payments or are having difficulty complying with the terms of their HECM, and have not yet contacted their mortgage servicer, to do so immediately. By contacting their servicer, homeowners can obtain a mortgage payment forbearance or a HECM extension. FHA also urges homeowners to engage with their mortgage servicer when their mortgage servicer contacts them about the new COVID-19 ALM or other loss mitigation home retention options.
Homeowners who are seeking more information on the options available to them should also consider contacting a HUD-approved housing counseling agency.
HUD is committed to removing barriers to homeownership for communities of color, persons with disabilities, and those with limited English proficiency. This includes removing long-standing barriers to obtaining fair housing. These communities have been disproportionately impacted by the COVID-19 pandemic, and HUD will continue to work to:
– Ensure that lenders and others in the real estate industry do not engage in practices that have an unjustified discriminatory effect on communities of color and other protected classes.
– Ensure that forbearance programs are actively and affirmatively marketed to those in the housing market area least likely to be aware of the options, least likely to apply, and to those that face barriers.
– Eliminate or reduce barriers for requesting forbearance.
– Ensure that lenders are aware of how anti-discrimination laws apply to communication with limited English proficient (LEP) households. As of HUD’s 2016 Limited English proficiency guidance, over twenty-five million persons in the United States – approximately nine percent of the population – have limited English proficiency.
– Ensure lenders understand their obligation to make reasonable accommodations for individuals with disabilities, including changes or exceptions to policies, practices, procedures, and services that may be necessary to provide equal opportunities and equal access for individuals with disabilities.
– Recognize that homeowners facing default may be vulnerable to foreclosure rescue scams that often target limited English proficient communities, and other communities of color.
– Ensure lenders are not discriminating in the maintenance and marketing of foreclosed properties. Lenders may not engage in substandard maintenance and marketing of foreclosed properties in communities of color, particularly while properly maintaining and marketing foreclosed properties in predominantly white communities.
HUD: Updated Servicing and Loss Mitigation Section of Handbook 4000.1
Updated 6/24/21: HUD delayed the effective date for policy changes made to Section III (Servicing and Loss Mitigation) Appendix 4.0 (FHA-HAMP Calculations) and Appendix 5.0 (Schedule of Standard Possessory Action and Deed-In-Lieu of Foreclosure Attorney Fees) of Single Family Housing Policy Handbook 4000.1.
Changes must now be implemented no later than March 31, 2022.
Investor Update
April 19, 2021
Source: HUD
Updates to Single Family Handbook policies strengthen loss mitigation approaches for struggling borrowers while streamlining key requirements for servicers
WASHINGTON – The Federal Housing Administration (FHA) today announced the publication of its update to the Servicing and Loss Mitigation section of the FHA Single Family Housing Policy Handbook 4000.1. This update streamlines many standard operational requirements for mortgage servicers, including revising FHA’s loss mitigation home retention “waterfall” so that servicers can more quickly offer effective loss mitigation home retention options to borrowers in danger of losing their homes to foreclosure. Additional changes streamline and enhance many servicing requirements to provide more consistency with industry practices and reduce barriers to servicing FHA-insured single family mortgages.
“With these updates, we have strengthened the ability of servicers to reach and help more struggling borrowers with FHA-insured mortgages, more quickly,” said Principal Deputy Assistant Secretary for Housing Lopa Kolluri. “The updates to our policies will ensure quality servicing activities, streamline servicing requirements, more closely align our servicing policies with industry servicing practices, and improve outcomes.”
The changes contained in the updated Section III of the FHA Single Family Housing Policy Handbook 4000.1 published today are based on rigorous internal analysis and extensive public feedback and will improve the effectiveness and efficiency of FHA’s servicing policies. The updates incorporate the actions FHA has already taken to support borrowers who are experiencing financial hardship due to COVID-19. The changes include:
• A revised loss mitigation waterfall that allows servicers to review struggling borrowers for a permanent FHA Home Affordable Modification Program (FHA-HAMP) home retention option without a lengthy forbearance, which has been proven to be highly effective at helping borrowers avoid redefault and foreclosure;
• Streamlined documentation requirements to avoid unnecessary delays and to align more closely with standard industry servicing practices, including removing signature requirements on Trial Payment Plans; and
• A revised structure for certain allowable costs and fees that corresponds with fee structures used by other industry participants.
“The work completed today responds to feedback we’ve received about the complexity and cost of servicing FHA-insured mortgages,” said Acting Associate Deputy Assistant Secretary for Single Family Housing Julie Shaffer. “FHA requirements will continue to reflect our high expectations of servicers and updating our processes and addressing outdated and unnecessary requirements will improve the program for borrowers and servicers.”
Freddie Mac: Guide Bulletin 2021-23: COVID-19 Moratorium Extension
Investor Update
June 24, 2021
Source: Freddie Mac
COVID-19 FORECLOSURE MORATORIUM
We are extending the foreclosure moratorium last announced in Guide Bulletin 2021-8. Servicers must suspend all foreclosure actions, including foreclosure sales, through July 31, 2021. This includes initiation of any judicial or non-judicial foreclosure process, motion for foreclosure judgment or order of sale. This foreclosure suspension does not apply to Mortgages on properties that have been determined to be vacant or abandoned.
ADDITIONAL RESOURCES
We encourage Servicers to review the following COVID-19 resources:
- Freddie Mac Single-Family web page on COVID-19 resources
- Freddie Mac Servicing FAQs on COVID-19
GUIDE UPDATES
The Guide will not be updated at this time to reflect these changes.
CONCLUSION
We appreciate the support that Servicers continue to extend to Borrowers coping with hardships attributed to COVID-19. If you have any questions about the changes announced in this Bulletin, please contact your Freddie Mac representative or call the Customer Support Contact Center at 800-FREDDIE.
Sincerely,
Bill Maguire
Vice President, Servicing Portfolio Management
FHFA: COVID-19 Foreclosure and REO Eviction Moratoriums Extended
Investor Update
June 24, 2021
Source: FHFA
Washington, D.C. – Today, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until July 31, 2021. The foreclosure moratorium applies to Enterprise-backed, single-family mortgages only. The REO eviction moratorium applies to properties that have been acquired by an Enterprise through foreclosure or deed-in-lieu of foreclosure transactions. The current moratoriums were set to expire on June 30, 2021.
This action is just the latest step FHFA has taken to benefit homeowners and the mortgage market during the pandemic. FHFA continues to monitor the effect of the COVID-19 servicing policies on borrowers, the Enterprises and their counterparties, and the mortgage market. FHFA may extend or sunset its policies based on updated data and health risks. Homeowners and renters can visit consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines.
CDC Extends Eviction Moratorium Through July 31
Industry Update
June 24, 2021
Source: The Hill
Additional Resource:
CDC (CDC Director Extends the Eviction Moratorium for 30 days)
The Centers for Disease Control and Prevention (CDC) on Thursday announced a one-month extension to the nationwide pause on evictions put in place amid the coronavirus pandemic.
The eviction moratorium, which was set to expire this month, will now last through July under the new order, which is expected to be the final extension, the CDC said.
“The COVID-19 pandemic has presented a historic threat to the nation’s public health,” the CDC said in a statement. “Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19.”
The CDC order was enacted in September under then-President Trump and subsequently extended by Congress and President Biden.
For full coverage, please click the source link above.
Apartment Building Partially Collapses Near Miami
Updated 6/25/21: FEMA issued an Emergency Declaration for areas in Florida affected by the Surfside building collapse that took place on June 24, 2021.
FEMA Emergency Declaration Florida (EM-3560)
Associated County ZIP Code List
Disaster Alert
June 24, 2021
Source: CNN
NOTE: This has not yet been declared a FEMA Disaster.
A residential building in Surfside, Florida, partially collapsed early Thursday. Here is what we know about the building so far:
– The building is located at 8777 Collins Avenue, a few miles north of Miami Beach.
– It was built in the 1980s, according to the Surfside Mayor Charles Burkett, and was “not lowly occupied.”
– The building has 12 stories and had 136 units. About 55 apartment units collapsed, according to Ray Jadallah of the Miami-Dade Fire Rescue.
For full report, please click the source link above.
FHFA: Sandra L. Thompson Announced as Acting Director
Investor Update
June 24, 2021
Source: FHFA
Additional Resource:
FHFA Director Mark Calabria’s Statement on the U.S. Supreme Court’s Collins v. Yellen Decision
HUD: Disaster Recovery Funds for Puerto Rico and USVI
Investor Update
June 21, 2021
Source: HUD
Department publishes Federal Register notice governing the use of $2 billion in CDBG-DR for a more resilient, efficient, reliable, and sustainable electric power system in Puerto Rico and USVI
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today published a Federal Register notice governing the use of $2 billion in Community Development Block Grant Disaster Recovery (CDBG-DR) funds for electric power system enhancements and improvements for Puerto Rico and the U.S. Virgin Islands. The publication of this notice is the latest in a series of HUD actions under the Biden-Harris Administration to support recovery and renewal in Puerto Rico and the USVI.
“Today’s announcement is an important step in addressing the recovery and resilience needs of Puerto Rico and the U.S. Virgin Islands,” said HUD Secretary Marcia L. Fudge. “By opening the door to this $2 billion in funding, HUD is enabling Puerto Rico and the USVI to improve the reliability and resilience of their electrical systems to promote environmental equity and to both withstand the impacts of climate change and contribute less to its causes.”
In 2017, Hurricanes Irma and Maria damaged significant elements of the electricity systems in Puerto Rico and the USVI. Following the hurricanes, five months of repairs were required to restore power to the USVI, and approximately eleven months of repairs were needed to restore power to Puerto Rico.
CDBG-DR funds for electrical power system improvements provide a unique and significant opportunity for Puerto Rico and the USVI to carry out strategic and high-impact activities to address necessary expenses and mitigate disaster risks to their electrical power systems; improve system reliability, resiliency, efficiency, and sustainability; and address each system’s long-term financial viability.
The Department seeks to maximize the impact of these CDBG-DR funds by encouraging the formation of public-private partnerships, partnerships with local, community, and neighborhood organizations, and through enhanced coordination with other Federal programs.
In the action plan governing the use of these funds, grantees are also required to describe how the funds will be used to address the needs of vulnerable populations, protected classes, and underserved communities; how the funded activities primarily benefit low- and moderate-income persons; and how the planned improvements will be designed and implemented to address the impacts of climate change.
Since its first days, the Biden-Harris Administration has prioritized action to enable stronger recovery for Puerto Rico and the USVI. This includes obligating long-awaited disaster recovery funds and removing onerous restrictions placed on the grants, such as incremental grant obligations, Federal Financial Monitor review, and more. With today’s Federal Register notice, ninety percent of promised funds have been obligated to Puerto Rico.