FHFA Extends Policy Allowing Purchase Of Qualifying Loans In Forbearance
The Federal Housing Finance Agency approved the extension of the temporary policy that allows the purchase of certain single-family mortgages in forbearance, met by specific eligibility criteria set by Fannie Mae and Freddie Mac. The policy will be extended to Dec. 21, 2020.
The FHFA and the Consumer Financial Protection Bureau (CFPB) announced the Borrower Protection Program to protect during the coronavirus pandemic, as well as 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 Enterprises, according to a press release. With data sharing the FHFA will be able to fulfill its obligation under the "Qualified Mortgage Patch" to ensure that loans sold to the Enterprises are complying with the intent of Dodd-Frank's ability to repay provisions.
"Eligible loans will continue to be priced to mitigate the heightened risk of loss to the Enterprises from said loans," according to the FHFA. "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 added that it will continue to monitor the COVID-19 pandemic's impact on renters, borrowers and the mortgage market and update policies as necessary.
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