FHFA announces new due date for policy on purchasing mortgages in forbearance

by Candyd Mendoza23 Oct 2020

The Federal Housing Finance Agency has extended the policy that allows for the purchase of single-family mortgages in forbearance that meet specific eligibility criteria as set by Fannie Mae and Freddie Mac.

Before the coronavirus pandemic, mortgage loans in either forbearance or delinquency were ineligible for delivery under Fannie and Freddie's requirements. However, that changed in April when the agency announced a temporary policy that permits certain single-family mortgages in forbearance to be delivered.

The FHFA has approved Nov. 30 as the new cut-off date for the policy.

"Eligible loans will continue to be priced to mitigate the heightened risk of loss to the Enterprises from said loans," FHFA said in a statement. "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 investors."

Additionally, the FHFA said it would continue sharing aggregated data with the Consumer Financial Protection Bureau on loans that enter forbearance before delivery to the GSEs through the Borrower Protection Program.

"The data sharing will allow FHFA to fulfill its obligation under the so-called ‘Qualified Mortgage Patch’ to ensure that loans sold to the Enterprises are complying with the intent of Dodd-Frank's ability to repay provisions," the FHFA said.

Read more: CFPB proposes new category of qualified mortgage