The pandemic disrupted the lives and finances of millions of Americans. Industry closures designed to stem the spread of the virus also cost many people their jobs. As a result, millions of Americans fell behind on their rent and mortgage payments. Local and state governments, as well as the federal government stepped in to do what they can to keep those affected in their homes. Unfortunately, some of the protections put in place by the federal government are expiring at the end of July. At the same time, COVID case numbers are rising all over our nation, which is creating fears of new lockdowns or restrictions. Fortunately, the White House just announced additional measures of relief for homeowners impacted by COVID. The team at Peoples Choice Mortgage is here to give you an update for what homeowners can expect by these latest efforts. 

New Relief Measures for Homeowners Behind on Mortgage Payments

In anticipation of federal moratirums expiring at the end of this month, the Biden administration announced a number of additional relief measures. The first measure announced was for anyone who has a government-backed mortgage. This includes VA loans, FHA loans, or USDA loans. It also includes anyone who is working with Freddie Mac or Fannie Mae. This particularl provision allows anyone who has missed a mortgage payment because of the pandemic to the end of their mortgage, with no penalties. 

Additionally, the White House said that they are rolling out packages for homeowners who need deeper levels of assistance. While unemployment has recovered from its peak levels during the pandemic, many are making less than they used to make. Others are also trying to pursue retraining in order to find jobs that are not vulnerable to pandemic conditions. For anyone who is in these situations or has found themselves behind on taxes or insurance, government agencies will provide additional help. Specifically, HUD, USDA, and the VA will offer homeowners who have mortgages through them a 25% reduction in their monthly payments. This will let them continue to make payments and build equity, while reducing their monthly housing expenses. All of these measures are designed to prevent as many Americans as possible from foreclosure. 

These measures are in addition to some other actions already taken by the federal government to provide help to homeowners. Recently, the government announced that Ginnie Mae will over 40-year mortgages for those who need to refinance into lower monthly payments. Additionally, the most recent stimulus package, the American Rescue Plan, created the Homeowner Assistance Fund. This fund provides money directly to states to provide homeowners mortgage assistance. Functionally, this fund provides money to individual homeowners to catch up on missed mortgage payments to prevent foreclosures. 

Forbearance Extension Still in Effect

Even though the eviction moratorium is ending, the forbearance extension is still ongoing and will not expire until the end of September. This extension allows anyone with a government loan or a loan through Freddie Mac or Freddie Mae to file for a special pandemic forbearance. This program has been incredibly successful and has allowed millions of homeowners to avoid foreclosure. As of now, there are still 1.8 million homwoners in this forbearance program. However, the numbers of homwoenrs in forbearance has been dropping steadily and are far below last year’s peaks. Homeowners are catching up on payments and are resuming their normal mortgage payments. This is fantastic news for all homeowners. The more Americans who are able to get out of forbearance and resume their mortgage payments, the healthier the real estate market is long term. 

States Fill Gaps in Federal Relief Efforts

Another piece of positive news for those worrying about expiring federal moratoriums is that states have been extending their own moratoriums. Places like California and New Jersey are extending their own eviction and foreclosure moratoriums. Measures like these are protecting renters, homeowners, and the real estate market as a whole. Most states are also offering some sort of mortgage payment assistance or rent payment assistance. 

Final Thoughts

Even though the pandemic is still far from over, the end of the federal eviction moratorium is not the end of help for renters and homeowners. Local and state governments, as well as the federal government recognize that a wave of foreclosures and evictions is not good for our nation. We all saw what happened to the entire economy when that happened in 2008. Goovernments at every level are committed to finding ways of preventing that from happening again. 

If you are facing hardship and need help with your mortgage payments, there is probably help you can take advantage of. If you have questions about the type of assistance available to you, contact us. At Peoples Choice Mortgage we understand how valuable homeowenrship is. That is why we will do everything in our power to help you get the information you need to keep you in your home. Everyone deserves to be a homeowner and a pandemic should not be a reason why that dream is taken away from you.