FHA Provides Struggling Borrowers Additional Time To Seek Forbearance
The Federal Housing Administration announced Tuesday that it will carry out President Joe Biden administration’s request to extend the deadline for financially stressed borrowers with FHA-insured mortgages to seek mortgage payment forbearance from their mortgage servicers.
The new deadline is March 31, allowing borrowers additional time to request and obtain up to six months of an initial pause in their mortgage payments.
Some 2.7 million homeowners are in forbearance plans, according to the Mortgage Bankers Association’s latest estimate.
“The rate of exits from forbearance slowed in the prior week, while the rate of new forbearance requests remained steady at a low level,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
FHA requires mortgage servicers to provide up to six months of Covid-19 forbearance when a borrower requests this assistance, and up to an additional six months of forbearance for borrowers who request an extension of the initial forbearance.
Borrowers needing assistance must engage with their servicer – the entity to which they make their mortgage payments – to obtain an initial Covid-19 forbearance on or before March 31.
“On the first day of his new administration, President Biden took immediate actions to stem the economic devastation experienced by the nation’s hardworking families because of the pandemic,” said acting HUD Secretary Matthew Ammon. “Today’s extension supports the president’s direction by providing more time for homeowners to seek mortgage payment relief.”
The forbearance request extension aligns with FHA’s recent extension of its foreclosure and eviction moratoria for single-family homeowners with FHA-insured mortgages, also extended through March 31.
The extension of the moratoria on foreclosures and evictions was announced on January 21 and implemented Biden’s January 20 “Day One” request for this action. Both measures are vital first steps to provide urgent relief to safeguard those struggling with financial and home uncertainty.
FHA encourages borrowers with FHA-insured mortgages who can make their mortgage payments to continue to do so. Borrowers with FHA-insured mortgages seeking additional information on available options should visit FHA’s COVID-19 Resources for Homeowners web page on FHA.gov. Other borrowers are encouraged to visit the Consumer Financial Protection Bureau’s Coronavirus Mortgage and Housing Assistance web pages.