Home / Daily Dose / FHFA Approves Forbearance-Program Extension
Print This Post Print This Post

FHFA Approves Forbearance-Program Extension

To support homeowners and mortgage lenders, the Federal Housing Finance Agency (FHFA) announced in a press release Thursday an extension of a temporary policy that allows for the purchase of some single-family mortgages in forbearance that meet eligibility criteria set by GSEs Fannie Mae and Freddie Mac. The policy will be extended for loans originated through December 31, 2020.

Earlier this year, FHFA and the Consumer Financial Protection Bureau (CFPB) announced the Borrower Protection Program "to ensure that borrowers are protected during the coronavirus national emergency and to facilitate related information sharing."

"To ensure that borrowers are qualifying for mortgages they can afford, FHFA will continue sharing aggregated data with the CFPB on loans that enter forbearance before delivery to the [GSEs]," FHFA said. "The data sharing will allow FHFA to fulfill its obligation under the so-called 'Qualified Mortgage Patch' to ensure that loans sold to the Enterprises are complying with the intent of Dodd-Frank's ability to repay provisions."

Due to the COVID-19 crisis, some borrowers requested forbearance shortly after closing but before the lender could deliver the loan to its respective GSE.

"Normally, mortgage loans in either forbearance or delinquency are ineligible for delivery under GSE requirements," the FHFA said. "In April, FHFA announced a temporary policy of allowing certain single-family mortgages in forbearance to be delivered.  Today's extension continues this policy for loans originated through December 31, 2020. Eligible loans will continue to be priced to mitigate the heightened risk of loss to the [GSEs] from said loans. These prudential measures also ensure fulfillment of the [GSEs'] charter requirements to only purchase loans that meet the purchase standards imposed by private, institutional mortgage investors."

FHFA says it will continue to monitor the coronavirus' impact on renters, borrowers, and the mortgage market and update policies as needed.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.

Check Also

Wells Fargo Names New Chief Revenue Officer

Wells Fargo announced today that Derek Flowers has been appointed the company’s Chief Risk Officer, effective immediately. Flowers ...

Your Daily Dose of DS News

Get the news you need, when you need it. Subscribe to the Daily Dose of DS News to receive each day’s most important default servicing news and market information, absolutely free of charge.