The Federal Housing Finance Agency (FHFA) Thursday announced that Fannie Mae and Freddie Mac will extend the purchases of qualified loans in forbearance, as well as other previously introduced loan-origination flexibilities related to the national pandemic crisis, until October 31. The special accommodations, which the agency says are aimed at "ensuring continued support for borrowers during the COVID-19 national emergency," were formerly set to expire at the end of this month.
A recap of the originally published "flexibilities":
The FHFA has temporarily approved the buying of "certain single-family mortgages in forbearance that meet specific eligibility criteria set by Fannie Mae and Freddie Mac," according to the original announcement. At the time, FHFA Director Calabria said, "“Extending [the GSEs]' ability to purchase these previously ineligible loans will help provide liquidity to mortgage markets. That said, to make homeownership sustainable, lenders have a responsibility to ensure that borrowers can make their monthly mortgage payment." The full explanation of this provision was updated at the end of August.
The FHFA on March 23 instructed the GSEs to ease standards for property appraisals. Changes included more-flexible underwriting guidelines, which allow exterior-only inspection appraisals or desktop appraisals. The FHFA at the time said the measures mean to support the secondary mortgage market's immediate liquidity needs.
The FHFA instructed Fannie and Freddie to loosen verification of employment requirements.
Back in March, a representative from the Mortgage Bankers Association spoke with Arkansas news outlet TalkBusiness.net about the appraisal and employment-verification flexibilities.
Finally, the FHFA will expand the use of power of attorney to assist with loan closings. Fannie answers FAQs related to power of attorney on its website.
"We have expanded the transaction types that are eligible for a party with a connection to the transaction to serve as attorney-in-fact, including an employee of the title insurance company providing the title insurance policy," Fannie Mae noted. "In addition to limited cash-out refinances, which are currently permitted in the Selling Guide, this exception now also applies to purchase transactions."
The agency noted in each statement that it will continue to monitor development and update its policies when necessary.