Federal Home Loans, Foreclosures and COVID-19

As of 3/20/20: NOTE THE FOLLOWING ARE FEDERAL LOAN PROGRAMS and DON’T APPLY TO PRIVATE or CONVENTIONAL LOANS:

A list of what the different federal lenders are doing in regard to foreclosures:

FHA Insured Single-Family Mortgages and Home Equity Conversion Mortgages:

• HUD Mortgagee Letter 2020-04   www.hud.gov/sites/dfiles/OCHCO/documents/20-04hsgml.pdf
• Fannie Mae Lender Letter 2020-02   singlefamily.fanniemae.com/media/22261/display
• https://www.fanniemae.com/portal/media/corporate-news/2020/renters-covid-19-multifamily-7002.html
• Freddie Mac Bulletin 2020-4 guide.  freddiemac.com/app/guide/bulletin/2020-4
• Freddie Mac Announces Nationwide COVID-19 Relief Plan Affecting More than 4 Million Multifamily Apartment Renters
• USDA encourages SFHGLP loan servicers to extend forbearance alternatives to borrowers whose health or employment has been impacted as a result of COVID-19.
• USDA Rural Development requires that holders suspend all foreclosure activity until April 30, 2020. The foreclosure suspension applies to the initiation of new foreclosure actions and to foreclosure actions already in process.
• VA strongly encourages loan holders to establish a sixty-day moratorium beginning March 18, 2020, on completing pending foreclosures or initiating new foreclosures on loans.

MUSINGS FROM DIANE:

foreclosure & eviction trap

What most people do not know if that the President cannot stop or postpone foreclosures or evictions.  Federal laws must come from Congress, then signed into law by the president.  State law come from the State Legislature, then signed into law by the governor of that state.  Normally, state laws govern real estate in that state (which also governs foreclosures and evictions in that state).  Federal laws or policies can govern federal agencies, such as HUD, Fannie or Freddie.

There is also a constitutional issue of “taking” someone’s property without just cause or repayment.  This applies to a landlord trying to evict someone for failure to pay or a lender trying to evict someone for failure to pay.  To take away the rights of the landlord or lender, without just cause is unconstitutional.

Just because our current president says something will happen is far from a guaranty that will happen.  Instead, this exemplifies his failure to understand how laws are created in the United States.  Shame on him because millions of people will think is a “real thing”.