The Federal Housing Finance Agency (FHFA) says Fannie Mae and Freddie Mac have been directed to continue giving important leeway to lenders, servicers and borrowers during the continued COVID-19 emergency.
The GSEs will extend several loan origination flexibilities that were set to expire on February 28 until March 31. Extended flexibilities 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.
Additionally, Fannie Mae and Freddie Mac are extending the moratoriums on single-family foreclosures and real estate owned (REO) evictions until March 31.
The moratorium applies only to GSE-backed, single-family mortgages, while the REO eviction moratorium applies to properties that have been acquired by Fannie or Freddie through foreclosure or deed-in-lieu of foreclosure transactions.
The FHFA also announced that borrowers with a mortgage backed by Fannie Mae or Freddie Mac may be eligible for an additional forbearance extension of up to three months. Eligibility for the extension is limited to borrowers who are on a COVID-19 forbearance plan as of February 28, and other limits may apply.
Further, COVID-19 payment deferral for borrowers with a GSE-backed mortgage can now cover up to 15 months of missed payments. COVID-19 payment deferral allows those borrowers to repay their missed payments at the time the home is sold, refinanced or at mortgage maturity.