Forbearances granted by the U.S. Department of Agriculture (USDA), the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) due to pandemic-related financial hardships will soon come to an end, according to an announcement on Tuesday.
The forbearances are now slated to end on May 31, according to the announcement.
This extension comes on the heels of a decision by the White House to end the presidentially-declared emergency for the COVID-19 pandemic that has been in place for over three years. On Monday, President Joe Biden signed a resolution that ends the emergency several weeks before it was set to expire on May 11.
“As the National Emergency may end earlier than originally expected, USDA has determined that a short period beyond the expiration of the COVID-19 National Emergency would be beneficial to both USDA borrowers and servicers,” USDA said in its announcement regarding the policy. “The USDA is extending the date by which a servicer may approve a borrower’s request for an initial COVID-19 forbearance.”
On April 7, HUD and FHA released a similar policy with the publication of Mortgagee Letter 2023-08 that extends the deadline for COVID-19 forbearances and Home Equity Conversion Mortgage (HECM) extensions to May 31.
The Mortgagee Letter language was also similar to language used in the USDA’s announcement, stating:
“As the National Emergency may end earlier than originally expected, HUD has determined that a short period beyond the expiration of the COVID-19 Presidentially Declared National Emergency would be beneficial to both FHA Borrowers and Mortgagees. This extension is intended to provide affected Borrowers ample time to request a COVID-19 Forbearance or HECM Extension, and for Mortgagees to offer and process these requests.”
A number of pandemic-related relief provisions put into place by the federal government have already been phased out, but some housing relief elements have been extended for the benefit of borrowers and mortgagees, according to HUD.
In the Mortgagee Letter, HUD specifies that no COVID-19 forbearance period may extend beyond November 30, 2023. The USDA also advises servicers to seek other solutions for borrowers following the end of their forbearances.
do we know how many are in forebearance?