FHFA Extends Temporary Policy Allowing Purchase of Qualified Loans in Forbearance to Aug. 31
The Federal Housing Finance Agency approved an extension of the temporary policy that allows for the purchase of certain single-family mortgages in forbearance that meet specific eligibility criteria set by Fannie Mae and Freddie Mac. The policy is extended for loans originated through August 31.
“Extending the Enterprises’ ability to purchase these previously ineligible loans will help provide liquidity to mortgage markets,” said FHFA Director Mark Calabria. “To make homeownership sustainable, lenders have a responsibility to ensure that borrowers can make their monthly mortgage payment.”
Earlier this year, FHFA and the Consumer Financial Protection Bureau announced the Borrower Protection Program to ensure borrowers are protected during the coronavirus national emergency and facilitate related information sharing. To ensure borrowers are qualifying for mortgages they can afford, FHFA will share with the CFPB aggregated data on loans that enter forbearance before delivery to Fannie Mae and Freddie Mac. The data sharing will allow FHFA to fulfill its obligation under the “QM Patch” to ensure that loans sold to the Enterprises are complying with the intent of Dodd-Frank’s ability to repay provisions.
In April, FHFA announced a temporary policy of allowing certain single-family mortgages in forbearance to be delivered. This new extension continues this policy for eligible loans.
“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 lenders,” FHFA said.