August 19, 2021
The end of the HUD foreclosure moratorium was announced earlier this year–the end date of the moratorium is listed as July 31, 2021.
That date is firm, at least according to the most recent FHA Mortgagee Letter published on this issue, which mentions, “foreclosures of FHA-insured mortgages may be initiated or resumed upon the expiration of the foreclosure moratorium in accordance with FHA requirements.”
The July 31st deadline is, at this time, not expected to be extended further.
However, there is also a moratorium on foreclosure-related evictions for FHA borrowers who are in default on their mortgages. That eviction moratorium has been extended until September.
HUD instructions to participating FHA lenders is clear. The Mortgagee Letter on the FHA/HUD official sites includes these guidelines:
“A Mortgagee must not initiate or continue with an eviction to acquire possession of the foreclosed property.” Those instructions remain in spite of the foreclosure moratorium’s end as mentioned above.
It’s easy to get confused over this issue–the FORECLOSURE process may resume now that the July 31, 2021 deadline has passed, but EVICTIONS are still prohibited until the end of September.
A HUD press release states that in the interest of avoiding “displacement of severely distressed borrowers and allow them time to access suitable housing options after foreclosure” the FHA and HUD have extended the foreclosure-related eviction moratorium until September 30, 2021.
The extension is hoped to provide affected FHA borrowers more time to obtain housing through federal, state, or local programs.
In general, the FHA/HUD guidance in this area applies to all affected FHA mortgages except for those which secure properties that have become vacant or abandoned.
Borrowers who are in trouble with their mortgages or having financial difficulty that might lead to home loan default and/or foreclosure should contact their loan servicers immediately to make arrangements before too many payments are missed.
In general, by the second missed payment borrowers may have fewer options to avoid loan default than they otherwise would–it pays to contact the lender as quickly as possible if you are having financial trouble.
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Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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