The Federal Housing Finance Agency (FHFA) issued guidance this week regarding the actions of Fannie Mae and Freddie Mac servicers relating to the end of COVID-19 foreclosure and REO eviction moratoriums.
Specifically, FHFA officials announced that Fannie Mae and Freddie Mac servicers would not be permitted to make a first notice or filing for foreclosure that would be prohibited by the Consumer Financial Protection Bureau’s (CFPB) Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X Final Rule before the CFPB rule takes effect.
“The COVID-19 pandemic has created many financial challenges for families,” Acting Director Sandra L. Thompson said. “Through no fault of their own, many of these families had to rely on COVID-19 forbearance to stay safe in their homes during the pandemic. Today, many families’ finances are improving, allowing them to exit forbearance. The protections FHFA is putting in place will protect vulnerable families as they begin their financial recovery from the impact of the COVID-19 pandemic.”
The CFPB final rule prohibits servicers from making a first notice or filing for foreclosure in most cases covered by the rule before Dec. 31, 2021. Servicers would be able to make a notice or filing for foreclosure on abandoned properties and those under foreclosure referral before March 2020. CFPB’s final rule will take effect on Aug. 31, 2021. The Enterprises’ moratoriums on single-family foreclosures and real estate owned (REO) evictions will expire on July 31, 2021.
The FHFA continually monitors the impact of COVID-19 servicing policies on borrowers, Fannie Mae and Freddie Mac, their counterparties, and the mortgage market.