Fannie Mae and Freddie Mac will extend their suspension of mortgage foreclosures through at least the end of the year, providing more relief for homeowners who are grappling with the economic pain of the coronavirus.
Fannie and Freddie, which backstop about $5 trillion of home loans, will also extend their moratorium on evictions from real-estate owned properties until at least Dec. 31, the Federal Housing Finance Agency said in a Thursday statement. The relief on foreclosures and evictions were both set to lapse at the end of the month.
The extensions are intended to keep consumers from being kicked out of their residences even if they can’t pay their mortgage or rent amid a surge in layoffs and lost income. In statements, Fannie and Freddie said the eviction moratoriums only apply to properties that the companies own. The eviction suspensions don’t apply to tenants living in homes that have not been foreclosed upon, Fannie and Freddie said.
FHFA Director Mark Calabria, whose agency regulates Fannie and Freddie, said the extensions will protect more than 28 million borrowers with a loan guaranteed by the companies. The move will add $1.1 billion to $1.7 billion to the expenses that Fannie and Freddie have already absorbed due to the coronavirus, the FHFA projected.
Congress has also protected homeowners from foreclosures by allowing borrowers affected by the pandemic to delay their monthly payments for more than a year without going into default. That provision was part of the $2 trillion stimulus bill that lawmakers approved in March.
Fannie and Freddie, which have been under government control since the 2008 financial crisis, don’t make loans. Instead, they buy mortgages issued by lenders and package them into securities that are sold to investors. Bondholders are guaranteed payment even if borrowers default.