The moratorium on foreclosures and evictions for one family for certain federal support mortgages have been extended until the end of December.
The expansions will benefit 28 million homeowners who guarantee mortgages through Fannie Mae and Freddie Mac, according to a press release from the Federal Housing Finance Authority.
The eviction moratorium applies to properties acquired by Fannie or Freddie through foreclosure or deed-in-place foreclosure transactions.
Both moratoriums were first expected to expire on August 31st.
“I think this is a positive step for homeowners in the lower and middle incomes,” said Mark Zandi, chief economist at Moody’s Analytics. “Extending the moratorium due to the pandemic is a good idea, because it will limit the long-term damage that would occur if people lost their homes.”
‘We need Congress to pass a fiscal package ‘
While the current expansion will serve as a temporary extension for those with single households, the FHFA said it is monitoring the situation if additional action is needed. FHFA projects additional spending from $ 1.1 billion to $ 1.7 billion, due to the existing COVID-19 separation moratorium.
More needs to be done, experts said. The moratorium removes the estimated 30 million U.S. tenants who are at risk of eviction. Nearly a third of homeowners and renters went into August with unpaid housing bills.
More than two weeks ago, President Donald Trump issued an executive order directing federal agencies to address evictions during the pandemic.
The moratorium also does not address the growing job losses, with another 1 million workers filing for unemployment benefits last week.
“If all we get is just an eviction moratorium on tolerance, then the economy will not move enough to the other side,” Zandi said. “We need Congress to pass a fiscal package to support the economy, otherwise we see credit problems.”
Dhara is a reporter for Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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