Under new mortgage-servicing guidelines, if you have a Fannie Mae or Freddie Mac loan and notify your loan servicer that you've applied to your state's Homeowner Assistance Fund program, the servicer must suspend foreclosure activities for up to 60 days.
In early 2021, President Joe Biden signed the American Rescue Plan Act into law. This law created a Homeowner Assistance Fund, a federal program, to give $10 billion to the states to help households that are behind on their mortgages and other housing-related expenses due to COVID-19. The 50 states and the District of Columbia are setting up various programs with allocated funding to distribute the money and assist financially distressed homeowners.
The state-administered programs provide homeowners experiencing a financial hardship due to COVID-19 after January 21, 2020, money to pay for qualified expenses related to mortgages and housing, such as:
Fannie Mae and Freddie Mac are privately-owned companies that get support from the federal government. They're commonly called "government-sponsored enterprises" or "GSEs."
These GSEs own or guarantee many residential mortgage loans in this country.
On April 6, 2022, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, announced that the GSEs will require a loan servicer to put a foreclosure moratorium in place for up to 60 days if the servicer learns that a borrower has applied for assistance from a state-run Homeowner Assistance Fund program.
Specifically, the servicer must delay initiating a judicial or nonjudicial foreclosure, moving for a foreclosure judgment or order of sale, or holding a foreclosure sale for up to 60 days if:
If the servicer determines that it didn't have sufficient time to delay starting the foreclosure process or moving for a foreclosure judgment or order of sale, the servicer has to document in the loan file why it was unable to delay the action.
Also, the Fannie Mae guidance says that if the approved funds don't fully reinstate the mortgage loan, the servicer must attempt to contact the borrower to resolve the remaining delinquency.
To find out if Fannie Mae owns your mortgage loan, use this Mortgage Loan Lookup tool. Use Freddie Mac's Loan Lookup tool to find out if Freddie Mac owns your mortgage loan. You can also ask your servicer if Fannie Mae or Freddie Mac owns your loan, or call 800-232-6643 (Fannie Mae) or 800-373-3343 (Freddie Mac).
Even after a foreclosure has started, it often takes at least several months before you'll lose your home. You could still have time to get help from a Homeowner Assistance Fund program (especially if you qualify for a moratorium) or work out an alternative to foreclosure with your loan servicer.
For example, homeowners with a federally backed mortgage loan, like a Fannie Mae or Freddie Mac loan, who've experienced a financial hardship due to the coronavirus pandemic can get a COVID-19 forbearance. Or you might qualify for another option, like a loan modification. (Even if your loan isn't federally backed, your servicer might offer a forbearance or another form of relief, like a loan modification, if the COVID pandemic has financially hurt you.)
If you have a Fannie Mae or Freddie Mac mortgage loan and can't make your mortgage payments, contact your loan servicer immediately to learn what alternatives to foreclosure are available. Be sure to tell the servicer that you've applied to your state's Homeowner Assistance Fund program if you've done so.
To learn more about alternatives for borrowers with Fannie Mae loans, go to Fannie Mae's Know Your Options website. For more information about options for borrowers with Freddie Mac loans, go to the Freddie Mac website.
On March 14, 2022, the Consumer Financial Protection Bureau published a blog post in which it strongly encouraged loan servicers to participate in Homeowner Assistance Fund programs so that borrowers can qualify for assistance. (If your servicer doesn't participate, you aren't eligible for help from a Homeowner Assistance Fund program.) It also advised servicers that they must ensure borrowers aren't improperly referred to foreclosure while the servicer is working with a borrower during the application process or waiting for payment of assistance funds. So, inform your servicer that you've applied to your state's Homeowner Assistance Fund program if applicable.
To get more information from the CFPB about mortgage assistance, go to its Help for Homeowners webpage.
Also, consider contacting a foreclosure attorney. A lawyer can advise you about your legal rights in a foreclosure under federal law and tell you about any state laws that protect you in the process.
Effective date: April 6, 2022