Biden administration unveils new aid to prevent foreclosure spike

The Biden administration said about 1.8 million Americans remain in forbearance today, more than a year after emergency safeguards were put in place to give homeowners the choice to suspend mortgage payments during the Covid-19 crisis.

The three government agencies that back mortgages — the Departments of Housing and Urban Development, Veterans Affairs and Agriculture — will offer new loss-mitigation options and tools intended to reduce borrowers’ monthly principal and interest payments by about 25 percent, according to a White House fact sheet. The changes bring the agencies in line with the options already offered to borrowers with mortgages backed by mortgage finance giants Fannie and Freddie.

HUD, USDA and the VA also announced that borrowers who have not suspended payments to date can still enter into a forbearance program through Sept. 30.

More than 7 million households took advantage of forbearance programs at some point over the last 16 months. Borrowers with federally guaranteed mortgages can take advantage of the aid for up to 18 months.