Mortgage

Fannie, Freddie, FHA present aid to some tenants because the eviction ban ends

The day before the federal eviction ban expired, the Federal Housing Administration, the Department of Veterans Affairs, and a state-sponsored corporate regulator granted relief to certain tenants.

The FHA, the Department of Veterans Affairs and the Federal Housing Finance Agency separately announced on Friday that they are extending moratoria on evictions from single-family homes through September 30, on the recommendation of the Biden administration.

Mortgage service providers can proceed with certain foreclosures following a ban on July 31, but according to the FHA, tenants of the affected properties cannot be evicted by the end of September.

Single-family real estate loans are either in foreclosure or processed by a deed in their place.

“The pandemic continues to have an overwhelming impact on the ability of Americans to make their monthly rent or mortgage payments. Today's extension of the eviction moratorium protects particularly vulnerable Americans who otherwise run the risk of losing a place to stay, ”said Sandra Thompson, deputy director of the FHFA, in a press release.

Many factors could speak in favor of additional relief for tenants, e.g. the reversal of the jobs lost as a result of the pandemic is still ongoing. The majority of positions lost between Q1 2020 and Q1 2020 will not be restored until after September, according to a recent report from Moody's Investors Service.

However, there are also some counter arguments to the extension of the federal eviction ban. A rental group filed a lawsuit this week to seek damages from the ban, and the Centers for Disease Control and Prevention's moratorium is subject to a judicial restriction making it difficult to extend.

"Given the recent proliferation of the Delta variant, including among Americans who are likely to face evictions and have no vaccinations, President Biden would have strongly supported a decision by the CDC to extend this eviction moratorium further," the White House said in a release Statement Thursday. "Unfortunately, the Supreme Court has made it clear that this lawsuit is no longer available."

Earlier this week, the FHFA also added multi-family tenant protection, which requires landlords with loans from state-sponsored companies Fannie Mae and Freddie Mac to give 30-day notice before terminating tenants for non-payment of rent.

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