The Federal Housing Finance Company introduced on Wednesday that Fannie Mae and Freddie Mac would proceed to purchase certified loans in forbearance till Sept. 30, extending the earlier deadline of Aug. 31.
The GSEs can even prolong different loan flexibilities initiated throughout the pandemic, together with accepting different value determinations on buy and price time period refinance loans, different strategies for documenting earnings and verifying employment earlier than closing, and increasing the usage of energy of legal professional to help with loan closings.
“Extending these COVID-19 flexibilities helps keep the mortgage market moving and borrowers safe during the pandemic,” mentioned FHFA Director Mark Calabria.
The transfer was applauded by varied mortgage trade teams.
“MBA and its members recognize FHFA and the GSEs extending these vital options,” mentioned MBA President and CEO Bob Broeksmit. “Both the origination flexibilities and the program to purchase loans in forbearance are providing important stability to the mortgage market during the pandemic, and today’s announcement will enable lenders to continue to make low rate mortgage financing readily available to consumers and avoid the inevitable credit tightening that would have resulted from their expiration.”
Fannie Mae and Freddie Mac started shopping for loans in forbearance in April. The variety of loans in forbearance has fallen to 7.2% of complete mortgage loans, the MBA reported on Monday, that means about 3.6 million owners are in forbearance plans.