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President Biden dismisses inflation concerns, saying the price spike will not last. However, Americans pay more in several areas. Ed Lawrence of FOX Business with more.
The Biden administration on Friday unveiled plans to expand homeowner assistance with government-guaranteed mortgages, an effort to avert a wave of foreclosures for Americans who fell behind on payments during the coronavirus pandemic.
The White House announced the new aid as other pandemic relief programs for homeowners expire: a federal foreclosure ban expires on July 31, while a similar program that granted a stay to people with mortgages guaranteed by Fannie Mae and Freddie Mac end September 30.
YELLEN SAYS INFLATION WILL BE HIGHER THAN ESTIMATED BIDEN ADMINISTRATION
The latest measures aim to allow homeowners who have lost their income due to the pandemic to extend their government-guaranteed monthly mortgage with lower payments, according to a White House backgrounder.
The three government agencies that support mortgages – the Ministries of Housing and Urban Development, Veterans Affairs and Agriculture – will offer homeowners about a 25% reduction in monthly principal and interest payments. The move is designed to align the options available to homeowners with government guaranteed mortgages with what is available to homeowners with Fannie and Freddie secured mortgages.
CONSUMER PRICES UP 5% PER YEAR, THE HIGHEST SINCE AUG 2008Q 2008
As the economy continues to rebound from the pandemic and the lockdown measures that followed, administration officials have been keeping a close watch on the housing market, which has seen house prices soar in recent months. At the same time, millions of mortgage borrowers still haven’t come out of the worst economic downturn in decades, raising fears that the market is experiencing a real estate boom and a housing crisis simultaneously.
In June, the White House extended the lockdown moratorium for a final month until July 31 and the forbearance window until September 30. An estimated 7.2 million U.S. households have taken advantage of the opt-out option in the past 16 months, the administration said.
Lawmakers have warned that forbearance is not forgiveness: at some point, homeowners will owe the payments they chose to temporarily withhold.
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At the end of the forbearance plan, homeowners will be given several options to make up for missed payments – but will not be required to repay everything all at once in what is known as a “balloon payment,” according to the company. Fannie Mae. Frequently, mortgage lenders will transfer the balance that homeowners have not paid during the forbearance period until the end of the loan.
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