Fannie Mae and Freddie Mac announced the second week in December that both GSEs would, as is traditional, place a hold on holiday evictions lasting from December 18, 2017, to January 2, 2018. The suspension applies not just to single-family homes, but also duplexes, triplexes, and quadplexes. The moratorium will not stop the foreclosure process, nor will it stall proceedings leading up to eviction. However, no actual evictions will take place during the timeframe of the moratorium and families will be allowed to remain in the properties until the moratorium is over.
Jacob Williamson, vice president of single-family distressed assets at Fannie Mae, suggested that homeowners affected by pending evictions “reach out to Fannie Mae or their servicer to get help.” Freddie Mac’s spokeswoman made a similar suggestion, saying that the GSE “strongly urges borrowers experiencing financial challenges to contact their mortgage servicer to explore one of the Freddie Mac workout options.”
Moratoria for Homeowners
While most homeowners are aware of the holiday moratorium on foreclosure evictions thanks to regular news coverage of these traditional practices, far fewer know that certain disasters may have associated moratoria as well. For example, Hurricanes Harvey, Irma, and Maria all were accompanied by Federal Housing Administration (FHA) 90-day foreclosure moratoria for FHA-insured homeowners who were impacted by the storms. Anywhere that the Federal Emergency Management Agency (FEMA) operated its Individual Assistance Program (IAP), the FHA has instructed lenders and servicers to “suspend all foreclosure actions against borrowers” until February 21, 2018 (Harvey), March 9, 2018 (Irma), and March 19, 2018 (Maria).
Information on foreclosure suspensions and eviction moratoria are important for real estate investors both so that they can abide by any federal regulations governing how they manage their properties and also because these may dramatically affect foreclosure timelines in areas of high interest to real estate investors. In most cases, a simple internet search will enable you to determine if a property is eligible for these programs, but always check for news on loan servicer and lenders’ websites as well if foreclosure and eviction of a possibly unwilling resident plays a role in your investment strategy.