More than 16,000 Utah homeowners were able to take advantage of U.S. Federal Housing Administration (FHA) programs and not lose their home during the COVID-19 pandemic, according to a release from Department of Housing and Urban Development Secretary Marcia L. Fudge. The programs ranged from payment forbearance to more permanent solutions such as a loan modification that allowed borrowers avoid foreclosure.
“Although the pandemic has ended, the economic effects will remain a challenge for the foreseeable future,” said Fudge. “These impactful and effective foreclosure prevention tools will help struggling borrowers find the right option to help them get back on their feet and keep them in their homes. These tools have been so successful already, which is why FHA worked to enhance them further and include more borrowers.”
The FHA has extended its COVID-19 toolkit at least for the next 18 months to help all eligible borrowers struggling to avoid foreclosure, regardless of the reason for their hardship. Included in the new enhancements are updates that increase the limit on the amount of interest-free arrearages that borrowers can pay at the end of their mortgage term to help maximize the number of borrowers able to retain their homes despite higher interest rates. The effective date of the changes is April 30, but mortgage servicers may begin offering these options to borrowers immediately.
In the past two years, FHA has helped 1,845,000 mortgage holders enter into an agreement with their mortgage servicer to have their mortgage payments paused or reduced (forbearance) due to COVID-19. Additionally, 1.2 million were able to resume payments and put any arrearages at the end of their mortgage or obtain a loan modification that reduced their payment to avoid foreclosure.