While the moratorium doesn’t apply to everyone, it’s a good
President Trump announced Wednesday a sweeping moratorium on
homeowners with mortgages backed by Fannie Mae or Freddie Mac
or Federal Housing Administration mortgages on single-family homes.
In addition, the Department of Housing and Urban Development (HUD)
will suspend evictions on public housing residents.
FHA loans and public housing residents account for more than 9
million households, while Freddie or Fannie-backed mortgages
account for the vast majority of single-family homes. The Freddie
and Fannie moratorium will last at least 60 days.
The moves come in response to the economic fallout caused by the
spread of COVID-19, commonly referred to as the coronavirus, which
could lead to
unemployment rising as high as 20 percent, according to
Treasury Secretary Steve Mnuchin.
Fannie Mae and Freddie Mac are guarantors on the vast majority
of mortgages, which they buy and bundle into bonds called
mortgage-backed securities. Most mortgages fall into this category,
97.7 percent of mortgage securities were issued by the agencies
so far in 2020, according to the Urban Institute.
This means if you have a mortgage, it was mostly likely sold to
Freddie or Fannie and thus the foreclosure moratorium likely
applies to you. Homeowners who don’t have mortgages backed by
Freddie or Fannie are likely to be subprime borrowers, condo
owners, or owners of particularly expensive housing
(the loan limit amount varies from county to county). To find
out if your mortgage is backed by Freddie or Fannie, or an FHA
contact the mortgage servicer on your mortgage statement.
This measure may end up temporarily staving off disaster for
the housing market. Otherwise, if unemployment spikes and
homeowners default en masse, it would lead to a massive increase in
available housing, reminiscent of
the financial crisis of 2008.
The moratorium on evictions of public housing residents, the
majority of whom are elderly and/or disabled, applies to more than
a million households. The moratorium does not apply to housing
voucher holders. HUD
Secretary Ben Carson told the Los Angeles Times that a
moratorium on FHA-backed multifamily housing could be coming, but
housing voucher recipients may need Congressional action.
While these two measures protect millions of Americans, renters
in private market housing remain vulnerable to eviction should they
suffer financial hardship because of the coronavirus.
cities across the country—particularly those with expensive
housing—have independently announced moratoriums on evictions
that range from two weeks to indefinitely. New York, Los Angeles,
San Francisco, and Miami are among the cities that have issued
Source: FS – All – Architecture 10
Coronavirus: Trump announces sweeping eviction and foreclosure moratorium through April