U.S. regulator orders 60-day freeze on foreclosures and evictions for Fannie, Freddie mortgages
WASHINGTON (Reuters) - Nearly half of all single-family U.S. homeowners will be protected from foreclosure or eviction for at least 60 days thanks to new relief from the regulator overseeing Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency, which oversees the two housing giants, said the relief is aimed at ensuring homeowners who are struggling to make mortgage payments due to virus’s economic impact are not kicked out.
The relief will apply to the 28 million homeowners with mortgages backed by Fannie and Freddie, which accounts for roughly 44% of the single-family mortgage market, an FHFA spokesman said.
“This foreclosure and eviction suspension allows homeowners with an enterprise-backed mortgage to stay in their homes during this national emergency,” said FHFA Director Mark Calabria. “The enterprises are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance.”
President Donald Trump announced Wednesday that properties overseen by the Department of Housing and Urban Development would see a similar foreclosure freeze until the end of April.
As government-sponsored enterprises, Fannie and Freddie were created by Congress to help boost the housing market. The pair purchase mortgages from banks and other mortgage lenders, then bundle those mortgages into securities to sell to investors. The pair then guarantee against any losses on those investments.
The pair, which are private companies with a government charter, were bailed out by the federal government in 2008 after suffering heavy losses during the subprime mortgage crisis, and have remained under government control since then. The Trump administration has said it is working to remove that backstop, but it is not clear if that work will be done before the 2020 presidential election in November.
Reporting by Pete Schroeder, Editing by Franklin Paul and David Gregorio