Most of the accommodations that have
been allowed lenders and borrowers by the Federal Housing Finance Agency (FHFA)
due to the COVID-19 pandemic were modified or extended this past week. FHFA,
the regulator and conservator of the GSEs Fannie Mae and Freddie Mac, extended
eligibility for mortgage forbearance by three months. Forbearance allows
homeowners who are financially impacted by the pandemic, to temporarily reduce
or forego mortgage payments. It has been available for three-month terms with
extensions available up to a total of 12 months. Existing plans would begin
reaching that deadline at the end of March but FHFA has now authorized an
additional three-month term
, a total of 15 months. An estimated 2.7 million
homeowners are in active plans.

The COVID-19 Payment Deferral allows
forborne homeowners to repay those missed payments at the time their home is
refinanced, sold, or when their mortgage reaches maturity. That program was
originally designed to cover 12 months of missed mortgage payments, but it too
has now been modified to 15 months.

The moratorium on single-family
foreclosures was extended by one month to March 31, 2021 as was the moratorium
on evictions. The eviction moratorium applies to properties held in GSE owned
real estate portfolios

The several, so-called loan
origination flexibilities put in place at the start of the pandemic to allow
continued support for borrowers have also been extended again, now through
March 31, 2021. These include:

  • 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.  

FHFA says it currently projects that
the GSEs will have to shoulder expenses of $1.5 to $2 billion due to the
existing foreclosure moratorium and its extension. The agency will continue to
monitor the effects of its emergency servicing policies on borrowers, the GSEs,
their counterparties, and the mortgage market and may extend or sunset its
policies based on the data and the health risk.

By Jann Swanson , dated 2021-02-11 10:42:51

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Courtesy of Mortgage News Daily

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