NESSEL: Programs meant to pause mortgage payments during pandemic failed

Local News

Michigan Attorney General Dana Nessel speaks as Gov. Gretchen Whitmer looks on during a Dec. 15, 2020, press conference in Lansing. (Courtesy Michigan Executive Office of Governor)

LANSING, Mich. (WLNS) — Michigan Attorney General Dana Nessel wants answers from the federal government about a program that she says failed to pause mortgage payments during the pandemic.

Nessel joined 20 other attorneys general are asking the government to take action by fixing failures to put in place mortgage restructure programs that would help those impacted by the COVID-19 pandemic to stay in their homes.

During the pandemic, the Federal Housing Administration (FHA) has helped borrowers in need remain in their homes by implementing payment pauses and forbearance programs.

These programs were aimed to help families lower their interest so that they have affordable monthly mortgage payments. It was specifically designed for low-income households, first-time homeowners, and households of color disproportionately affected by the pandemic.

In a letter to FHA —led by District of Columbia Attorney General Karl A. Racine—the attorneys general detailed that several mortgage loan servicers employed and approved by FHA have failed to adequately implement the FHA COVID-19 Recovery Modification, as well as other COVID-19 relief programs to support borrowers.

The letter asks FHA to ensure that its approved and employed mortgage loan servicers are taking the necessary steps to implement the FHA COVID-19 Recovery Modification in its entirety.   

“At a time when so many face ongoing financial hardships, we must deliver on assurances provided to those who are struggling,” Nessel said. “I join my colleagues in urging our federal partners to verify proper implementation of this vital program.”

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