In a recent report by the U.S. Department of Housing and Urban Development, approximately 113,900 New Jersey residents have held onto their homes throughout the COVID-19 pandemic as a result of government-sponsored forbearance and home retention resources.
This number takes into account the pandemic timeline from March 2022 to December 2022, and includes 67,000 New Jersey residents who received assistance through forbearance, and 46,900 N.J. residents who received assistance through home retention support resources.
According to HUD, Federal Housing Authority borrowers in New Jersey, who were unable to make their mortgage payments during the pandemic were given COVID-19 forbearances or longer-term solutions, such as loan modifications. HUD also states that availability of these programs will continue.
“Although the pandemic has ended, the economic effects will remain a challenge for the foreseeable future,” said HUD Secretary Marcia L. Fudge.
HUD made the announcement on Feb. 8. HUD’s website lists COVID-19 Advance Loan Modification as one of its loss mitigation options, which is a permanent change in the terms of a borrower's mortgage to achieve at least a 25 percent reduction to the borrower's monthly principal & interest payment. HUD’s website also lists COVID-19 Recovery modification among its home retention options, which is utilized for borrowers who can no longer make mortgage payments.
HUD defines this option as extending the term of a borrower’s mortgage to 30 or 40 years at a fixed rate in order to attain a reduction of the principal and interest portion of the borrower's monthly mortgage payment by 25 percent. The COVID-19 Recovery Modification can include the use of a partial claim to resolve the borrower’s outstanding arrearages, but the partial claim cap will be 30 percent on April 30, 2023. This includes the use of a partial claim, if available, to resolve outstanding arrearages.
“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,” said Fudge. “These tools have been so successful already, which is why FHA worked to enhance them further and include more borrowers.”