12.3.4.2 Fannie Mae Foreclosure Moratorium

On March 18, 2020, Fannie Mae announced a sixty-day moratorium on foreclosures due to COVID-19 through Lender Letter 2020-02.²⁹⁷ The initial moratorium only provided a pause on foreclosure sales and did not mention a stay on the initiation of the foreclosure process. As discussed above, the CARES Act broadened the scope of the moratorium to include initiating foreclosures and moving for judgment in active foreclosure cases.

Upon expiration of its initial moratorium and the CARES Act moratorium, Fannie Mae extended its moratorium to June 30, 2020, to August 31, 2020, to December 31, 2020, to January 31, 2021, to February 28, 2021, to June 30, 2021, and then finally to July 31, 2021.²⁹⁸

Fannie Mae did not extend its moratorium beyond July 31, 2021; however, it did require servicers to comply with the CFPB’s pre-foreclosure protections before their August 31, 2021, effective date. According to Fannie Mae Lender Letter 2021-02, “[d]uring the period between the end of the suspension of foreclosure activities outlined above (Jul. 31, 2021) and the effective date of the Final Rule (Aug. 31, 2021), servicers must not take any action that would violate the Final Rule if it were in effect during that period.”²⁹⁹

For advocates addressing issues that arose when the moratorium was in place, Fannie Mae used broad language for the moratorium that was in effect through July 31, 2021. It stated: “During the period of the extension, servicers may not, except with respect to a vacant or abandoned property, initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure sale.”³⁰⁰ Fannie Mae exempted vacant and abandoned buildings from its moratorium.