The Federal Housing Finance Agency announced it is extending a policy that allows Fannie Mae and Freddie Mac to purchase some single-family mortgages in forbearance in an attempt to support the liquidity of mortgage lenders during the coronavirus pandemic.
Originally enacted in April, the policy is designed to protect borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie or Freddie. Prior to the change, loans in forbearance were ineligible to be sold under Fannie and Freddie requirements, placing the borrower and the lender in jeopardy.
“Extending the Enterprises’ ability to purchase these previously ineligible loans will help provide liquidity to mortgage markets. That said, to make homeownership sustainable, lenders have a responsibility to ensure that borrowers can make their monthly mortgage payment,” FHFA Director Mark Calabria said.
The policy is extended for loans originated through the end of August.