Key Highlights
- FHFA extends foreclosure and eviction moratorium to December 31
- FHFA delays date to begin implementing its market refinance fee to December 1
The Federal Housing Finance Agency (FHFA) extended its foreclosure and eviction moratorium until December 31. This most recent extension is the third extension it has granted. This moratorium applies to borrowers with mortgages backed by Fannie Mae and Freddie Mac, or more than 28M homeowners.
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Previously, the FHFA had announced that the June 30 end date for its foreclosure and eviction moratorium would be extended to August 31. Then, just four days prior to August 31, the FHFA announced this third moratorium extension to December 31.
This Fannie and Freddie foreclosure moratorium applies only to government backed single-family mortgages only, not to tenants in homes that have not been foreclosed.
Malloy Evans, senior vice president and single-family chief credit officer at Fannie Mae, said, “With this latest extension of the foreclosure and eviction moratorium, we can continue to help ensure distressed borrowers are able to remain in their homes during this national emergency.”
The FHFA recommends that borrowers who are struggling to pay their mortgages or who are facing possible foreclosure talk with their loan servicers as soon as possible. Those borrowers may be eligible to apply for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months. The FHFA has also extended the deadline that GSEs can continue buying qualified loans in forbearance until September 30.
By the way, Black Knight indicated that the overall delinquency rate (30 days of more overdue) fell to 6.91% in July BUT that the number of seriously delinquent mortgages (90 days or more) jumped to a 10-year high counting forbearances in July.
The Federal Housing Finance Agency also announced that it was delaying the implementation of its market refinance fee originally scheduled to take effect on September 1 to December 1. Again, this market refinance fee only applies to borrowers with mortgages backed by Fannie Mae and Freddie Mac.
This delay came about because of opposition from the real estate industry. The Mortgage Bankers Association (MBA), one of the strongest opponents to this FHFA fee, said, “The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times.”
The MBA also said that such a -.5% refinance fee (an average of $1,400/homeowner) would be particularly felt by low- and moderate-income homeowners.
The FHFA’s rationale for this refinance fee is potential pandemic-related losses that could exceed $6B for the GSEs, such as $4B in loan losses due to projected forbearance defaults, $1B in foreclosure moratorium losses and $1B in servicer compensation and other forbearance costs.
Thanks to HousingWire.
Also read: Mortgage Payments Can Be Delayed Up to One Year, Fannie and Freddie Initiate Small Multi-Family Loans, Fannie & Freddie to Buy Loans in Mortgage Bailout Program
