FHFA Extends Forbearance For Multifamily Borrowers

Good news for renters. The Federal Housing Finance Agency announced Monday that Fannie Me and Freddie Mac are allowing mortgage servicers to extend forbearance agreements for multifamily property owners during the coronavirus pandemic. The announcement applies to existing owners with existing forbearance agreements, bringing the total forbearance – or pause in paying mortgage payments – to up to six months. “During the pandemic, FHFA has been focused on protecting renters and borrowers while ensuring the mortgage market functions as efficiently as possible,” FHFA Director Mark Calabria said. “The multifamily mortgage forbearance extension announced today will help renters stay in their homes and help property owners retain their properties.”  While the properties are in forbearance, landlords must suspend all evictions for…

Watchdog Gives Lenders A Pass On Complaints

After spending months trying to arrange a repayment plan with her mortgage servicing company, a South Carolina homeowner filed a complaint with the Consumer Financial Protection Bureau. The complaint was listed as closed just days after Shellpoint Mortgage Servicing provided the agency with its explanation – one that did not resolve the issue and one that is not sufficient to the homeowner. The homeowner learned that Shellpoint was her new mortgage servicer in December after receiving correspondence that she and her husband were behind on their payments. Although she said they were current as of September, Shellpoint said otherwise. The homeowner said they eventually reached an agreement to make down-payment of $6,577.71 so they could enter a repayment plan, but Shellpoint…

Debt-To-Income Nixed Under CFPB Proposal

The Consumer Financial Protection Bureau announced Monday that it is proposing replacing the debt-to-income ratio for qualified mortgages with a loan price-based approach. The bureau said it is proposing the change because “a loan’s price, as measured by comparing a loan’s annual percentage rate to the average prime offer rate for a comparable transaction, is a strong indicator and more holistic and flexible measure of a consumer’s ability to repay than debt to income alone.” The proposal is one of two issued by the CFPB to address what is known as the GSE Patch, which is schedule to expire in January 2021 or when the GSEs (Fannie Mae and Freddie Mac) exit conservatorship, whichever comes first. CFPB explains the need…

FHFA, FHA Extend Eviction, Foreclosure Ban

The Federal Housing Finance Agency and Federal Housing Administration announced Wednesday that they are extending the moratorium on foreclosures and evictions as the nation continues to cope with economic fallout from the COVID-19 pandemic. The ban on evictions and foreclosures will be in place until at least Aug. 31. It was set to expire on June 30. “To protect borrowers and renters during the pandemic we are extending the Enterprises’ foreclosure and eviction moratorium. During this national health emergency no one should worry about losing their home,” FHFA Director Mark Calabria said. “While the economic recovery is already underway, many American families still need more time and assistance to regain their financial footing,” HUD Secretary Ben Carson said. “Our foreclosure and…

Consumer Groups Sue To Disband CFPB “Task Farce”

A group of consumer advocates sued the Consumer Financial Protection Bureau and Director Kathy Kraninger on Tuesday, alleging they created a task force that does not serve the public interest and has secretly conducted its work in violation of federal law. The plaintiffs – including the National Association of Consumer Advocates, U.S. Public Interest Research Group and consumer law Professor Kathleen Engel – allege the task force is “stacked with industry-aligned members, excludes consumer advocates, does not serve a public interest, and has conducted its work behind closed doors.” The lawsuit seeks to prevent the task force from operating. “A group of hand-picked industry lawyers and consultants that meets behind closed doors — with no consumer advocates or disparate points…

FHFA: Fannie, Freddie Play Too Big Of A Role

Federal Housing Finance Agency Director Mark Calabria on Monday warned Congress that Fannie Mae and Freddie Mac play a disproportionately large role in the housing market and are badly undercapitalized – creating significant risk to the nation’s economy. In a letter to the banking and housing chairs introducing FHFA’s annual report, Calabria urged Congress to give the agency greater authority to charter competitors to Fannie and Freddie and limit their relative power in the housing market. “A root cause of the 2008 financial crisis was imprudent mortgage credit risk backed by insufficient capital,” Calabria wrote to Congress. “This fundamental problem remains unresolved today. The Enterprises are inarguably undercapitalized for their size, risk, and systemic importance. Calabria said Fannie and Freddie…

FHFA To Re-Propose Minimum GSE Financial Eligibility

The Federal Housing Finance Agency announced Monday that it will not implement new financial eligibility requirements for mortgage lenders that service or sell loans to Fannie Mae and Freddie Mac. The new requirements, announced Jan. 31, were to be implemented this month. “Due to recent market events, the Federal Housing Finance Agency … will be re-proposing the updated minimum financial eligibility requirements for Fannie Mae and Freddie Mac Seller/Servicers,” FHFA said in a statement. “FHFA has determined that it is prudent to work with the Enterprises to reassess and re-propose these requirements, including incorporating lessons learned from the evolving COVID-19 national emergency.” The revised requirements would have forced mortgage sellers and servicers to maintain a base net worth of $2.5…

Redlining Legacy: Reduced Wealth In Black Community

By Jim Perskie More than 50 years after redlining was outlawed, the practice still has a profound impact on the wealth and property values in neighborhoods across the country, according to a report released by Redfin on Thursday. The typical homeowner in a neighborhood that was “redlined” for mortgage lending by the federal government has gained 52 percent less – or $212,023 – in personal wealth generated by property value increases than those in greenlined neighborhoods over the last 40 years. “More than half a century after it was abolished, redlining continues to dictate the racial makeup of neighborhoods and Black families still feel the socioeconomic effects of such a discriminatory housing policy,” Redfin chief economist Daryl Fairweather said. Redlining is…

FHFA Extends Loan Origination Flexibility Through July

Another month. The Federal Housing Finance Agency announced Thursday that it is extending the loan origination flexibilities currently offered by Fannie Mae and Freddie Mac designed to help borrowers during the COVID-19 national emergency.  Originally put in place at the height of the pandemic, this is the second time they have been extended – this time through July 31. They include: Alternative appraisals on purchase and rate term refinance loans;Alternative methods for verifying employment before loan closing;Expanding the use of power of attorney and remote online notarizations to assist with loan closings; andAuthority to purchase mortgages in forbearance. …

Powell: Rates To Stay At 0 Until Economy Improves

Federal Reserve Chairman Jerome Powell said Wednesday that the Fed is committed to “using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible.” That includes keeping interest rates very low. “In March, we quickly lowered our policy interest rate to near zero, where we expect to keep it until we are confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals,” he said. In speaking with reporters after the Fed meeting, Powell stressed the public health crisis caused by the coronavirus pandemic is far from over – and the economic impacts will…