GSEs to keep buying loans in forbearance through Nov. 30
After extending some coronavirus pandemic-related loan flexibilities earlier this week, the Federal Housing Finance Agency (FHFA) has now extended its temporary policy allowing the government-sponsored enterprises (GSEs) to purchase certain single-family mortgage loans in forbearance through Nov. 30.
The agency has extended this policy several times; it was most recently set to expire at the end of October.
While NAFCU is supportive of the FHFA's efforts to support mortgage servicers experiencing increased forbearance requests and provide additional liquidity during the pandemic, the association flagged concerns about the increase of the loan-level pricing adjustment (LLPA) fee to 500 basis points for first-time homebuyers and 700 basis points for all other loans under the policy.
The FHFA said the pricing adjustment is to mitigate the heightened risk of loss to the GSEs related to these loan purchases. The agency has taken other steps to address pandemic-related risks, including by implementing a policy change for the GSEs 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. As a result, the FHFA delayed the fee's implementation to Dec. 1.
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.
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