FHFA Extends GSE Forbearance Purchases through Sept. 30; Extends COVID-Related Loan Processing Flexibilities
The Federal Housing Finance Agency announced this afternoon that Fannie Mae and Freddie Mac will extend buying qualified loans in forbearance and several loan origination flexibilities through September 30.
FHFA said the changes “are to ensure continued support for borrowers during the COVID-19 national emergency.” The flexibilities were set to expire on August 31.
“Extending these COVID-19 flexibilities helps keep the mortgage market moving and borrowers safe during the pandemic,” said FHFA Director Mark Calabria.
Extended flexibilities include:
- Buying qualified loans in forbearance;
- Alternative appraisals on purchase and rate term refinance loans;
- Alternative methods for documenting income and verifying employment before loan closing; and
- Expanding the use of power of attorney to assist with loan closings.
Mortgage Bankers Association President & CEO Robert Broeksmit, CMB, issued a statement in support of the FHFA action:
“MBA and its members appreciate FHFA and the GSEs extending these important features,” Broeksmit said. “Both the origination flexibilities and the program to purchase loans in forbearance are providing important stability to the mortgage market during the pandemic, and today’s announcement will enable lenders to continue to make low rate mortgage financing readily available to consumers and avoid the inevitable credit tightening that would have resulted from their expiration.”