The Federal Housing Finance Agency (FHFA) has announced a further extension on foreclosure moratoriums on government-backed mortgages and eviction bans on real estate owned (REO) properties.
In a Press release, the FHFA said that Fannie Mae and Freddie Mac will extend their moratoriums on single-family foreclosures and REO eviction until February 28. The foreclosure moratorium applies to government-backed, single-family mortgages. Meanwhile, the REO eviction ban applies to properties that have been acquired by Fannie or Freddie through foreclosure or deed-in-lieu of foreclosure transactions.
“To keep our communities safe, and families in their homes during the COVID-19 pandemic, FHFA is extending Fannie Mae and Freddie Mac's foreclosure and eviction moratorium,” said FHFA Director Mark Calabria.
This is the fifth time the agency has extended the bans. Last week, president-elect Joe Biden proposed pushing back the moratoriums for another eight months. But some housing providers said that Biden's plan would only create a larger mess for landlords and tenants.
Read more: What does the stimulus deal mean for mortgage?
“In the end, there will be an even bigger tsunami of evictions and foreclosures,” said Richard Kruse, principal of asset management firm Gryphon USA. ”This is a delay in the market unraveling itself and increases the inevitable consequences.”
The agency projects that the GSEs would shoulder additional expenses of $1.4 billion to $2 billion due to the existing COVID-19 foreclosure moratorium and its extension.