Fannie and Freddie extend eviction, foreclosure moratorium

Fannie Mae and Freddie Mac are extending their moratorium on foreclosures and evictions until Dec. 31, providing relief to millions of homeowners and mortgage holders.

The moratorium was set to expire at the end of August. The foreclosure moratorium only applies to properties with single-family mortgages backed by Fannie Mae and Freddie Mac, while the eviction moratorium applies only to homes owned by Fannie Mae and Freddie Mac.

The move comes amid concerns from landlords over tenants’ ability to pay rent, as government aid runs out.

Unemployment benefits, which provided individuals with up to $600 a week, expired on July 31. And conversations between Congressional Democrats and Republicans over another stimulus package have stalled.

In August, President Trump put out an order for agencies to “consider” another eviction ban for properties backed by Fannie Mae and Freddie Mac.

The moratorium delay means a projected wave of foreclosures will not happen until after the November presidential election.

A recent report from the Mortgage Bankers Association found that about 16 percent of Federal Housing Administration mortgages were in delinquency at the end of the second quarter. And courts are preparing for more eviction lawsuits. In August, New York’s courts announced that as many as 14,000 evictions filed before the pandemic could proceed.

The agency overseeing Fannie and Freddie, the Federal Housing Finance Agency (FHFA), is also facing scrutiny from the mortgage and housing industries over their plans to raise fees on lenders for refinancing mortgages by 0.5 percent.

On Wednesday, the agency said it would delay the uptick in fees from September until December. Industry groups said the fee would add an average of $1,400 to homeowners seeking to refinance their mortgages. Some industry observers believe the move was geared to shore up capital as Fannie and Freddie prepare to go private once again.

Fannie and Freddie do not originate mortgages, but instead buy mortgages that they then securitize to sell to investors. By backing these loans, they help control mortgage rates, which are currently at historic lows.