HUD Announces Revised COVID-19 Relief Deadlines
When COVID-19 forced closures, furloughs, layoffs, and other measures, the Department of Housing and Urban Development along with the FHA announced a range of foreclosure relief measures for FHA borrowers; loan forbearance and other measures designed to keep borrowers in their homes came as a welcome relief. In April of 2020, HUD published Mortgagee Letter 2020-06 which announced policies including forbearance, “Standalone Partial Claims”, and other assistance.
But it was determined that the initial efforts weren’t enough; HUD also announced loan forbearance options for those who needed them--options that extended the initial forbearance period.
Then in October, 2020, the Department of Housing and Urban Development and the Federal Housing Administration once more determined the need to extend the deadline for approving a COVID-19 Forbearance or an HECM Extension beyond the original and earlier-modified deadlines announced previously.
The October announcement states that borrowers “directly or indirectly” affected by COVID-19 who are struggling with FHA Reverse Mortgages have forbearance and forbearance extension options open to them and there is also relief for those who are struggling with making payments on FHA purchase loans.
The original measures mentioned above included expiration dates on the October 30, 2020 date but thanks to the October announcement, FHA HECM or Reverse Mortgage borrowers have the options available until the end of December, 2020.
This also applies to those who seek relief for FHA loans used to purchase a home-the December 2020 deadline is effective for these borrowers, too.
There is the possibility that a second wave of the pandemic could affect the new deadlines–could the FHA revise the deadlines once more and extend them into the new year? It’s not safe to assume that is true--all who experience financial trouble and struggle to make house payments during the pandemic should reach out to their loan servicers as soon as possible.
If you need such help, do NOT delay if you need to make arrangements and discuss loan forbearance options. Loan forbearance is not automatic! Borrowers who have not made arrangements with their loan servicers may have little to no protection against home loan default and foreclosure.
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