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Biden Extends COVID-19 Foreclosure Protections

Real Estate Law concept.  Model of house and a gavel.
By Andrew Leonatti on February 18, 2021 1:45 PM

This week, the White House announced that the federal government is extending coronavirus pandemic-related foreclosure protections until June 30. The move ends any drama of what would happen when the previous deadline of March 31 approached.

With millions suffering financial hardships, the announcement will give homeowners behind on their mortgage payments time to breathe. However, be aware that these extensions will not go on indefinitely, and they do not apply to every struggling homeowner.

Federally Backed Mortgage Holders Get Relief

The announcement means that the approximately 11 million homeowners who hold mortgages backed by the U.S. Department of Housing and Urban Development (HUD), Department of Veterans Affairs (VA), or the Department of Agriculture (USDA) are safe from foreclosure until June 30.

The deadline for requesting mortgage payment forbearance now also lasts until June 30. Forbearance means you can temporarily stop payment or pay a reduced amount on your mortgage, although you will have to make up those payments later.

Successful applicants can receive up to six months of forbearance in three-month increments. The estimated 2.7 million homeowners already on this federal forbearance plan can also extend this relief for an additional six months.

Other Homeowners Also Getting Help

Most Americans hold mortgages backed by Fannie Mae and Freddie Mac, not the federal agencies listed above. The Federal Housing Finance Agency (FHFA) announced last week that Fannie- and Freddie-backed mortgages can receive an additional three months of forbearance, lasting up to 15 months.

The agency also extended foreclosure protections on those mortgages until March 31.

Between this week's White House announcement and last week's announcement for Fannie- and Freddie-backed mortgages, approximately 70% of mortgage holders in the U.S. can request pandemic-related forbearance.

Relief Is Not a 'Get Out of Jail Free' Card

It's important to remember that you must pay back the amount that you missed during forbearance. For most people who take advantage of the options above, however, these federal agencies will not require immediate repayment of all missed mortgage payments. Payment plans are possible.

Additionally, if you hold a mortgage backed by a private lender, the relief options above do not apply to you, and you could still be at risk of foreclosure. However, your lender may also offer forbearance options, and if you believe you are at risk of foreclosure, you can talk through your situation with an attorney.

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