The Department of Housing and Urban Development will suspend foreclosures and evictions for mortgages insured by the Federal Housing Administration until the end of April, a move that will affect about 8.1 million mortgages.

The Federal Housing Finance Agency (FHFA) also ordered Fannie Mae and Freddie Mac, the companies behind about half of the nation’s $11 trillion mortgage market, to suspend foreclosures and evictions for any single-family mortgages they back for “at least 60 days,” the agency said.

The move, announced at a White House press conference, is part of a broad-based response by the administration to the fallout from the rapidly spreading coronavirus pandemic, which threatens to shut down large swaths of the economy and has wreaked havoc in many countries overseas.

FHFA Director Mark Calabria said the foreclosure and eviction suspension will allow people “to stay in their homes during this national emergency,”

Fannie and Freddie “are working with mortgage servicers to ensure that borrowers facing hardship because of the coronavirus can get assistance,” Calabria said in a statement, adding that those borrowers should get in touch with their mortgage servicers as quickly as possible.

Calabria told economists on a conference call this afternoon that the agency is seeking to help both those borrowers affected by the virus and those who were struggling to make payments before the outbreak. Out of a public health concern, he said, Fannie and Freddie would make sure people who were already behind on their mortgages aren’t evicted and put on the street in the middle of a pandemic.

HUD Deputy Secretary Brian Montgomery said he has not been in any discussions with the Trump administration about urging commercial lenders to suspend mortgage payments in the crisis. Italy suspended mortgage payments last week.

Montgomery said the FHA has a “robust set of tools” to deal with turmoil in the housing market in a crisis, noting they’ve suspended foreclosures and evictions before at a regional level in the wake of natural disasters like hurricanes.

“For the time being, it just hits the pause button and provides steadiness to the housing market,” Montgomery said in a phone interview. “This is a first step; people who were concerned about [losing their homes] can cross that off their list for now.”

The FHFA earlier this month had announced that Fannie Mae and Freddie Mac would provide payment forbearance — allowing mortgage payments to be suspended for up to a year — to borrowers hit by the outbreak. The two government-owned enterprises also reminded mortgage servicers that hardship forbearance is an option for borrowers unable to make payments.

Consumer Financial Protection Bureau Director Kathy Kraninger, the chief official tasked with helping consumers struggling with the economic fallout from the outbreak, released a statement today praising the housing agencies for the suspensions.

The bureau has “encouraged financial institutions to work with their customers affected by the coronavirus,” Kraninger said in an email.

“Consumers’ first stop in the face of hardship is with their creditors and their financial institutions, so our message was important for regulated entities to hear,” she added.

~From Politico