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12.3.6.2 FHA Foreclosure Moratorium

HUD issued an initial moratorium on foreclosures, which covered the initiation of foreclosures, on March 18, 2020 through Mortgagee Letter 2020-04.340 Upon expiration of the CARES Act, HUD extended the moratorium to June 30, 2020, to August 31, 2020, to December 31, 2020, to February 28, 2021, to March 31, 2021, to June 30, 2021, and then to July 31, 2021.341 The extension of the deadline to July 31, 2021, was in response to the Biden Administration’s policy announcement to help borrowers with pandemic related hardships avoid foreclosure.342

In line with the other federally backed investors, FHA did not extend its foreclosure moratorium beyond July 31, 2021. It also did not adopt a bridge between the end of its moratorium and the effective date of the CFPB’s amendments to Regulation X related to COVID-19 hardships.343

For advocates addressing moratorium-related legal issues, Mortgagee Letter 2021-15 (dated June 25, 2021) incorporated broad language from prior letters regarding the scope of HUD’s now-expired moratorium: “FHA-insured Single Family mortgages, excluding vacant or abandoned properties, are subject to an extension to the moratorium on foreclosure through July 31, 2021. The moratorium applies to the initiation of foreclosures and to foreclosures in process.”344 HUD’s moratorium also halted evictions from homes with FHA-insured single-family mortgages.

Footnotes

  • 340 HUD, Mortgagee Letter 2020-04 (Mar. 18, 2020).

  • 341 HUD, Mortgagee Letters 2020-13, 2020-19, 2020-27, 2020-43, 2021-03, 2021-05; 2021-15; 2021-19.

  • 342 The White House, Fact Sheet: Biden Administration Announces Extension of COVID-19 Forbearance and Foreclosure Protections for Homeowners (Feb. 16, 2021); Federal Housing Finance Agency, News Release, FHFA Extends COVID-19 Forbearance Period and Foreclosure and REO Eviction Moratoriums (Feb. 25, 2021).

  • 343 HUD, Mortgagee Letter 2021-19 (July 30, 2021).

  • 344 HUD, Mortgagee Letter 2021-15 (June 25, 2021)