October 21, 2020

FHFA issues proposed rule for GSEs, extends COVID loan flexibilities

housingThe Federal Housing Finance Agency (FHFA) Monday issued a proposed rule that would require the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac – to provide advance notice of new activities and obtain approval from the agency before launching new products. The proposed rule replaces the interim final rule that has been in effect since 2009.

As proposed, the rule would establish criteria for determining whether a new activity requires notice to the FHFA and if the activity merits public notice and comment, as well as implement section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

“The proposed rule will enhance the safety and soundness of the secondary mortgage market by ensuring the Enterprises adhere to their statutory missions,” said FHFA Director Mark Calabria. “This proposed rule is an important step as the Agency works to end the Enterprises’ conservatorships.” 

In addition, the agency has announced that it is extending several of its pandemic-related loan flexibilities through Nov. 30 to ensure continued support for borrowers. The flexibilities, which were originally set to expire Oct. 31 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.

NAFCU will continue to work with the FHFA on any housing finance reform-related efforts and to ensure credit unions’ concerns are addressed as they work to meet the needs of their members during the pandemic.