Analysts say unemployment will remain a persistent problem even after the pandemic subsides.
For the second time since President Joe Biden took office, his administration has extended a foreclosure ban and mortgage obligation for borrowers as the coronavirus pandemic and its economic impact drag on.
In an announcement made Tuesday, the White House announced that the US Department of Housing and Urban Development (HUD), the US Department of Veterans (VA) and the US Department of Agriculture (USDA) have jointly extended mortgage relief programs that ban foreclosures and delays allow mortgage payments.
This includes extending a homeowners enforcement moratorium to June 30th and extending the mortgage leniency registration window to June 30th for borrowers who wish to seek leniency. Agencies will grant borrowers who indulged on or before June 30, 2020, up to six months of additional indulgence for mortgage payments in three-month increments, the White House said.
“These critical safeguards should expire in March, leaving many at risk of further debt and losing their homes,” the announcement said. “Now homeowners will receive much-needed help when we face this unprecedented national emergency. Today’s action builds on the steps the president took on day one to extend the foreclosure moratoria on government-guaranteed mortgages. “
Last week, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, extended the forbearance for eligible borrowers with a Fannie or Freddie-covered mortgage for up to three months. Together, these measures will cover 70 percent of existing single-family home mortgages, according to the White House.
“Today’s measures will directly benefit the 2.7 million homeowners currently in COVID forbearance and expand the availability of forbearance options on nearly 11 million government-supported mortgages across the country,” the press release said.
Unemployment rates were sky high during the pandemic. More than 1 million Americans continue to register jobless claims each week.
“This is a recognition of the fact that millions of people are unemployed or underemployed due to COVID-19 and we won’t be back to full employment anytime soon,” said Holden Lewis, home and mortgage specialist at NerdWallet. in a statement.
In a statement, Bankrate.com financial analyst Greg McBride said long-term unemployment will be a persistent problem even as the pandemic subsides and the economy opens up again.
“Forbearance enrollment has been extended to June 30, which will prove extremely beneficial for those who lose their jobs in the months ahead,” he said.
Federal agencies will consolidate the resources available to homeowners and tenants to avoid foreclosure or eviction at consumerfinance.gov/housing.
The announcement made no mention of a nationwide eviction ban, which currently expires on March 31. However, McBride said the homeowner relief would also “benefit tenants whose landlords receive relief from these provisions on their federally covered mortgages.”
In the announcement, the government urged Congress to pass Biden’s proposed $ 1.9 trillion stimulus package, the US bailout plan.
“The rescue plan provides for a homeowner support fund that will provide the states with US $ 10 billion to help struggling homeowners catch up on their mortgage payments and utilities,” the press release said. “This relief is critical for homeowners with home mortgages who are unable to take advantage of today’s measures and may face longer-term challenges.”
Email Andrea V. Brambila.
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