Biden administration announces more help to stem foreclosures

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(Bloomberg) — The White House on Friday announced plans to expand aid for mortgage borrowers who have fallen behind on payments during the coronavirus pandemic.

Enhanced assistance will be provided to homeowners with government-backed mortgages who have been negatively impacted by the pandemic, with the aim of cutting some monthly payments by roughly 25%, according to a White House fact sheet.

The move is designed to more closely align options for mortgages backed by the Department of Housing and Urban Development, the USDA, and the Veterans’ Affairs Department with those offered for mortgages backed by Fannie Mae and Freddie Mac, the White House said.

As the economy has started to return to life following the COVID-19-caused lockdowns, administration officials continue to closely monitor the housing market. Housing prices have climbed during the pandemic. At the same time, with millions of Americans out of work, people have struggled to pay mortgages or rent. The administration has wanted to ensure people did not lose their homes or apartments in the middle of a massive public health crisis if they could not pay their bills.

Earlier this year, the Biden extended a moratorium on foreclosures and the time period during which homeowners could enroll in mortgage forbearance programs if they had government-backed loans. In June, the administration extended the foreclosure moratorium for one final month until July 31 and the forbearance window until September 30. Roughly 7.2 million American households used the forbearance options.

This latest step seeks to provide some help to those with government-backed mortgages.

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