HUD says it helped 2 million homeowners avoid foreclosure during pandemic

Feb. 8 (UPI) -- Nearly two million homeowners were able to avoid foreclosure during the COVID-19 pandemic because of Federal Housing Administration programs, the Department of Housing and Urban Development said Wednesday.

From March 2020 through December 2022, 1,845,000 borrowers who could not pay their mortgages were able to avoid foreclosure by obtaining a COVID-19 forbearance or a loan modification.

"Although the pandemic has ended, the economic effects will remain a challenge for the foreseeable future," HUD Secretary Marcia L. Fudge, said in a statement. "These impactful and effective foreclosure prevention tools will help struggling borrowers find the right option to help them get back on their feet and keep them in their homes. These tools have been so successful already, which is why FHA worked to enhance them further and include more borrowers."

Last week the FHA said that they were extending COVID-19 relief for eligible borrowers for another 18 months. Included in the updated rules are increases in the limit of interest-free arrearages that borrowers can pay at the end of their mortgage. HUD said that this will help offset recent higher interest rates.

"The mandatory effective date of the changes is April 30, 2023, but mortgage servicers may begin offering these options to borrowers immediately," HUD said.

HUD added that another 1.2 million have been able to avoid foreclosure and resume payments thanks to loan modifications.