At the end of August, Fannie Mae announced an extension of a temporary moratorium on residential foreclosures and evictions that was originally set to expire on August 31, 2020. The moratorium applies to single-family mortgages backed by Fannie Mae and is now set to expire on December 31, 2020. The eviction suspension applies specifically to homes owned by Fannie Mae and does not apply to tenants if a home has not been foreclosed by Fannie Mae. According to Fannie Mae:
- Homeowners who are adversely impacted by the COVID-19 national emergency may request mortgage assistance by contacting their mortgage servicer.
- Foreclosure-related activities (except as to vacant or abandoned properties) and evictions of occupants from real estate owned by Fannie Mae are suspended until December 31, 2020.
- Homeowners impacted by COVID-19 are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.
- Servicers must report the status of the mortgage loan to the credit bureaus in accordance with the Fair Credit Reporting Act, including as amended by the CARES Act, for homeowners impacted by COVID-19.
- Homeowners in a forbearance plan will not incur late fees.
- After forbearance, a servicer must work with the borrower on a permanent plan to help maintain or reduce monthly payment amounts as necessary, including a loan modification.
If it is unknown whether a mortgage is owned by Fannie Mae, this loan lookup tool will provide an answer.
By extending the temporary moratorium, Fannie Mae is providing debtors an opportunity for private relief. This relief is in addition to government protections, such as Oregon Governor Kate Brown’s Executive Order 20-37 that extended prohibitions on residential and commercial foreclosures in Oregon through December 31, 2020. Despite economic growth picking up in the third quarter of 2020, it is unclear how quickly the economy will rebound and how continued cases of COVID-19 might negatively impact economic recovery. Still, creditors and landlords—in the residential and commercial context—continue to demonstrate patience and restraint with debtors on rent, mortgages, and other debts through this pandemic.
The additional time afforded by Fannie Mae—as well as government protections and the patience of creditors—provides debtors the space they need to develop a repayment plan. Nonetheless, debtors should remain diligent, know their rights, and communicate openly with their creditors/landlords to work out mutually agreeable solutions. Once protective moratoriums expire, there is no telling how creditors and landlords will behave. It is best to strive for certainty now by engaging in clear communication and negotiation, if possible.