As more borrowers exit COVID-19 forbearance programs, the Biden administration today announced several new relief measures designed to help mortgage borrowers with loans through the Department of Housing and Urban Development, Department of Veterans Affairs and the Department of Agriculture avoid foreclosure. These actions are intended to “bring federal agency options closer in alignment with payment reduction and loan modification options for borrowers with Fannie Mae and Freddie Mac mortgages.”
Among other things, HUD will begin offering in the coming months a standalone partial claim option for borrowers who are able to resume their current mortgage payments, as well as a loan modification option that would extend the term of the mortgage to 360 months at market rate and targets reducing the borrowers’ monthly principal and interest portion of their monthly mortgage payment by 25%.
Meanwhile, USDA and the VA will begin offering new alternatives for borrowers to help them achieve up to a 20% reduction in their monthly P&I payments.