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The Federal Housing Finance Agency (FHFA) announced Thursday that Fannie Mae and Freddie Mac, the enterprises that the FHFA oversees, will extend temporary loan origination flexibilities designed to ensure continued support for borrowers during the COVID-19 pandemic until April 30. These allowances previously were set to expire March 31.
Extended flexibilities include alternative appraisals on purchase and rate-term refinance loans; alternative methods of documenting income and verifying employment before a loan closing; and expanding the use of power of attorney to assist with loan closings.
Certain temporary flexibilities including employment verification, condominium project reviews, and expanded power of attorney, are expected to be retired on April 30.
As health and safety conditions improve, FHFA says it will actively monitor mortgage market participants' use of all temporary measures and retire those that are no longer needed or not extensively used.
In a previous statement, Fannie Mae said it "has taken a number of actions to help homeowners and renters facing financial hardship due to COVID-19. In addition to suspending foreclosures and evictions affecting homeowners, Fannie Mae extended eviction protections to multifamily renters when the property owner received a forbearance, reminded homeowners they are never required to repay missed payments after a forbearance period all at once, shared tips to help homeowners avoid foreclosure fraud or scams, and announced a new COVID-19 payment deferral option to help homeowners who are ready to resume their monthly mortgage payments following a COVID-19 forbearance. These and other resources we make available are part of our ongoing Here to Help education effort, aimed at helping homeowners and renters impacted by COVID-19 understand the options available to them."
FHFA Director Mark Calabria has said that the FHFA flexibilities and previously issued forbearance and foreclosure-moratorium extensions have been put in place in order "to keep families in their home during the pandemic."
"FHFA projects expenses of $1.5 to $2 billion will be borne by Fannie and Freddie due to the existing COVID-19 foreclosure moratorium and its extension," according to a press release earlier this year. "FHFA continues to monitor the effect of the COVID-19 servicing policies on borrowers, the GSEs, and their counterparties, and the mortgage market."
The agency's actions Thursday represent the latest steps it has taken to benefit renters, property owners, and the mortgage market during the pandemic. FHFA will continue to monitor the coronavirus' impact on tenants, borrowers, and the mortgage market and update policies as needed. FHFA may extend or sunset its policies based on updated data and health risks.
Homeowners and renters can visit consumerfinance.gov/housing for up-to-date information on their relief options, protections, and key deadlines.
