September 25, 2020

FHFA makes another extension to GSE loan forbearance policy

housing marketThe Federal Housing Finance Agency (FHFA) is again extending its temporary policy allowing the government-sponsored enterprises to purchase certain single-family mortgage loans in forbearance. It was set to expire Sept. 30 after two previous extensions, and is now extended to Oct. 31, 2020. NAFCU is actively engaged with the FHFA to ensure credit union mortgage servicers have the relief needed to accommodate increased forbearance requests.

In addition to extending the forbearance policy, the FHFA extended several other relief measures that were set to expire next week, including:

  • 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.

The agency last month also extended its moratorium on foreclosures and evictions through the end of the year. Fannie Mae and Freddie Mac have pages devoted to coronavirus resources and guidance available online.

NAFCU is working closely with the FHFA to address credit union mortgage servicer concerns and had previously urged the agency to provide relief to servicers that, without action by the FHFA, would have to continue making principal and interest payments to the GSEs on loans in forbearance. The FHFA in April heeded NAFCU's call and announced it will provide a four-month limit on advances of principal and interest payments for loans in forbearance sold to the GSEs.

In addition, NAFCU continues to voice concerns about the GSEs' policy to impose a 0.5 percent fee on most mortgage refinance loans. NAFCU came out strong against the adverse market refinance fee when it was announced, arguing that it would hurt credit unions and their mortgage borrowers as they try to recover from the coronavirus pandemic, and its advocacy achieved at least a delay of the policy until Dec. 1.

NAFCU will continue to monitor the FHFA's efforts to support liquidity in the mortgage market and work with the agency to ensure credit unions' concerns are addressed.