Foreclosure Protections and Mortgage Relief for Texas Homeowners
Here are a couple useful federal guides to mortgage assistance options and foreclosure protections enacted in response to the COVID-19 pandemic and its financial impacts on households. The following is a summary of some of these federal protections:
- Foreclosure bans
- The Federal Housing Finance Agency has extended its moratorium on single-family mortgage foreclosures through July 31, 2021, for homeowners with Fannie and Freddie-backed single-family mortgages.
- The FHA has extended its foreclosure and eviction moratorium through July 31, 2021, for homeowners with FHA-insured single-family mortgages, except for vacant or abandoned properties.
- The USDA has extended its suspension of foreclosures and related evictions for borrowers with USDA Single Family Housing and Direct and Guaranteed loans through July 31, 2021.
- The VA has extended its moratorium on evictions and foreclosures for homeowners with VA loans through July 31, 2021.
- Further extensions of these foreclosure bans are unlikely, but homeowners who are behind on their mortgages have some additional protections under federal law. See below.
- Forbearance rights
Under the CARES Act, borrowers with certain types of federally-backed or federally-funded mortgages on their single-family homes are eligible to request a forbearance from payments. No late fees, interest, or penalties accrue during the forbearance period beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract. Here’s more information about the protections. The CARES Act did not include a date on when these protections expire so individual federal agencies have issued ongoing guidance and extensions of their forbearance policies.
- For loans backed by HUD/FHA, USDA, or VA, the deadline for requesting an initial forbearance has been extended to September 30, 2021.
- There is currently no application deadline for loans backed by Fannie Mae and Freddie Mac.
- Here is information on how long forbearance periods last and options for extensions.
- Here’s a site with links to the different federal loan programs and their forbearance policies and how to find out if your loan is covered by one of these programs.
- Additional protections: In June 2021, the CFPB finalized a new rule that establishes several safeguards for homeowners before their loan servicer can start the foreclosure process. The rule goes into effect on August 31, 2021. The CFPD has also created a streamlined loan modification process for homeowners who are delinquent on their mortgages.
Financial Assistance to Homeowners
March 2021: The American Rescue Plan approved by Congress includes $9.96 billion in funding to help homeowners avoid foreclosure through Homeowner Assistance Fund, along with $39 million to assist rural homeowners through USDA’s Section 502 and 504 direct loan programs. The Homeowner Assistance Fund will be administered by the US Department of Treasury and disbursed to the states and may be used to help protect homeowners from mortgage delinquencies, defaults, foreclosures, utility cut offs, and to promote homeowners’ housing stability.
If you know of any updates that should added to this list, please email CommunityAssistanceProject@law.utexas.edu.