The FHFA approved an extension of its temporary policy allowing the acquisition of certain single-family mortgages in forbearance that satisfy Fannie Mae and Freddie Mac-established eligibility requirements. The extension of the policy applies to loans originated through August 31, 2020.
A joint effort of the CFPB and FHFA, the Borrower Protection Program was instituted earlier in the year in order to ensure “borrowers are protected during the coronavirus national emergency and facilitate related information sharing.” FHFA shares “aggregated data on loans that enter forbearance before delivery to the Enterprises” with the CFPB.
Thanks for the data sharing, the FHFA will be positioned to meet its obligations under the so-called “QM Patch.” It’s an assurance that loans sold to the Enterprises are complying with the intent of Dodd-Frank’s ability to repay provisions.
Extending the Enterprises' ability to purchase these previously ineligible loans will help provide liquidity to mortgage markets, suggested Director Mark Calabria. "That said, to make homeownership sustainable, lenders have a responsibility to ensure that borrowers can make their monthly mortgage payment," he continued.
Not long after closing on their single-family loan and preceding the lender’s ability to deliver the mortgage loan to the Enterprises, some borrowers have pursued payment forbearance in the midst of the pandemic. Typically, under Enterprise requirements, mortgage loans in forbearance or delinquency fail to qualify for delivery.
A temporary policy, forging the way for delivery for certain single-family mortgages in forbearance, was announced on April by the FHFA. As a result of the extension, this policy for loans originated through August 30 of this year remains in place. Additionally, eligibility loans will remain priced to mitigate the accentuated loss potential to the Enterprises stemming from these loans. The fulfillment of the Enterprises' charter requirements to purchase loans exclusively that satisfy the purchase standards imposed by private, institutional mortgage investors are ensured by the prudential measures.
Meanwhile, as needed, FHFA still will keep tabs on the coronavirus' impact on renters, borrowers, and the mortgage market and update policies. For more information, you can visit the joint Department of Housing and Urban Development, FHFA, and CFPB website at cfpb.gov/housing.