With the federal foreclosure moratorium set to expire next week, the Biden administration on Friday announced it was taking steps to prevent some foreclosure for those with government-backed mortgages.
Last month, the Centers for Disease Control and Prevention announced it was extending a pause on foreclosures one final time. The CDC chose to end the moratorium, even though a July 5 Census Bureau survey indicated that 3.6 million people said they would likely have to leave their homes in the next two months due to eviction.
In an effort to lessen the impact, the Biden administration on Friday announced it was taking steps to provide relief to some homeowners by reducing borrowers' monthly principal and interest (P&I) payments.
According to a statement from the White House, homeowners with government-backed mortgages through the Department of Housing and Urban Development (HUD), the USDA and the VA will get "enhanced assistance" in an effort to prevent foreclosures.
The White House says that Federal Housing Administration "will require mortgage servicers to offer a no cost option to eligible homeowners who can resume their current mortgage payments." For those who won't be able to resume their monthly mortgage, HUD will "enhance servicers' ability to provide all eligible borrowers with a 25% P&I reduction."
In addition, the USDA and the VAS will provide "new alternatives for borrowers to help them achieve up to a 20% reduction in their monthly P&I payments."
"This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac," the White House statement read.