President Biden has taken further steps to alleviate the coronavirus pandemic’s economic impact on American households, signing measures to extend a federal foreclosure moratorium through the end of June and also extending mortgage forbearance relief for homeowners.
The actions, announced by the White House on Tuesday, will prolong through June 30 a series of homeowner protections that were first introduced last year during the federal government’s initial response to the pandemic. The measures will extend the federal moratorium on mortgage foreclosures; keep open the forbearance enrollment window for homeowners seeking to delay their mortgage payments; and provide up to a further six months of forbearance relief for borrowers who entered forbearance before June 30, 2020.
The protections, which were due to expire on March 30, apply to all federally backed mortgages, which represent the majority of residential mortgages in the U.S. According to the Biden administration, the actions will aid 2.7 million homeowners currently in COVID-related mortgage forbearance, and extend forbearance availability for nearly 11 million government-backed mortgages nationwide.
“The COVID-19 pandemic has triggered a housing affordability crisis,” the White House said in a press release, citing data indicating that one in five renters is currently behind on rent and more than 10 million homeowners are behind on mortgage payments. It also noted that these hardships have unevenly impacted people of color, who “make up a disproportionate share of borrowers with delinquent loans and loans in forbearance due to COVID-related hardship.”
“These critical protections were due to expire in March, leaving many at risk of falling further into debt and losing their homes,” the White House said. “Now, homeowners will receive urgently needed relief as we face this unprecedented national emergency.”
The measures did not address or extend the federal moratorium on evictions, which is due to expire at the end of March. The Biden administration also urged Congress to pass the American Rescue Plan, the President’s proposed $1.9 trillion coronavirus relief package, which would create a Homeowners Assistance Fund, providing states with $10 billion in funding to aid struggling homeowners.
That relief is “critical for homeowners with mortgages in the private market” that are not federally backed and “who are not able to take advantage of today’s actions and may face longer-term challenges,” the White House said.
