Losing one’s job has many different financial implications, but perhaps none are more worrisome than falling behind on mortgage payments. Foreclosure can come faster than most homeowners realize, too. Thanks to a current ban on foreclosures, Texas homeowners who are struggling with mortgage payments may have time to address this issue.
The Federal Housing Finance Agency — FHFA — established the foreclosure ban earlier in 2020, and it recently extended that ban until Aug. 31. The ban and its extension is in response to growing unemployment numbers, which recently passed 16%. While this ban only applies to single-family mortgages that are FHA-insured, these types of loans make up approximately 70% of all home loans in the United States.
Unfortunately, few homeowners are aware of the ban or relief options available through their lenders. In a survey of homeowners, Fannie Mae found that 69% did not realize that any action had been taken to temporarily stop foreclosures. Another 60% did not know if their lenders offered any type of deferral programs. It does not appear as if lenders are going out of their way to inform borrowers of possible relief.
The FHFA’s ban has been effective at protecting many homeowners, as there were only 8,767 foreclosure filings in May 2020 — the lowest number since April 2005. However, the current ban does not erase the possibility of foreclosure after it expires. Homeowners in Texas who have fallen behind on their mortgage payments would be well advised to consider their options for fighting foreclosure in the future.