Key Highlights
- Newest extension now consistent with Fannie and Freddie’s foreclosure and eviction moratorium set to expire December 31
- Initial temporary policy to expire May 31 but several extensions including this one makes possible FHFA’s buying qualified loans in forbearance through December 31
- FHFA and CFPB now partnering to launch Borrower Protection Program
With the goal of providing stability and support to both homeowners and mortgage lenders, the Federal Housing Finance Agency (FHFA) recently announced that Fannie Mae and Freddie Mac are to continue buying qualified loans currently in forbearance through December 31.
This newly extended FHFA deadline is now consistent with Fannie and Freddie’s extensions of foreclosure and eviction moratorium also announced to expire on December 31.
Initially set to expire on May 31 when this temporary policy was put in place as the coronavirus began devastating both the job market and economy when it hit in March/April, these extensions are continuing responses of support to homeowners and lenders being assaulted by impacts of the virus.
In its public statement announcing this December 31 extension, the FHFA said, “Eligible loans will continue to be priced to mitigate the heightened risk of loss to the Enterprises from said loans. These prudential measures also ensure fulfillment of the Enterprises’ charter requirements to only purchase loans that meet the purchase standards imposed by private, institutional mortgage investors.”
The FHFA also referred to its latest partnership with the Consumer Financial Protection Bureau (CFPB). This partnership is launching the Borrower Protection Program, a program that enables the FHFA and CFPB to share servicing information in efforts designed to help protect borrowers.
The CFPB is to provide information and analytical tools to the FHFA via a secure interface. The FHFA is to provide the CFPB with information from Fannie and Freddie about forbearances, loan modifications and other loss mitigation initiatives. Also, the FHFA is to share data on loans entering forbearance with the CFPB prior to the FHFA passing along that data to Fannie and/or Freddie.
Additionally, the Mortgage Bankers Association recently indicated that the rate of Fannie/Freddie forbearance dropped to 3.72%, a continuing trend of declining forbearance rates. Some 3M US homeowners continue in forbearance plans with 25.02% of that 3M in initial phases of forbearance and some 73.14% of that 3M in a form of extension.
Thanks to the FHFA, CFPB, Fannie Mae, Freddie Mac, the Mortgage Bankers Association and HousingWire.
Also read: COVID Bailouts Improving BUT Nearly 3M Borrowers NOT Recovering, Mortgage Size Hits New Record High While Rates Hold, Defining Elements of Mortgage Forbearance – Part I
