Refinance Option Available To Low-Income Borrowers

The Federal Housing Finance Agency announced a new refinance option that will provide low-income borrowers with reduced interest rates and lower monthly payments. The new option is available to borrowers with Freddie Mac and Fannie Mae backed loans. It includes: A requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate.A maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver (the Enterprises will provide the lender a credit of $500 upon the loan’​s sale to an Enterprise).A waiver of the 50 basis point up-front adverse market refinance fee for borrowers with loan balances…

Feds Release $1B In Affordable Housing Funds

Fannie Mae and Freddie Mac will disburse $1.09 billion in affordable housing grants for the year – more than double the funding released last year, the Federal Housing Finance Agency announced Monday. The U.S. Department of Housing and Urban Development’s Housing Trust Fund will receive $711 million, while $383 million will go to the Treasury Department’s Capital Magnet Fund. The Housing Trust Fund allocates money annually to states and state-designated entities for the production or preservation of affordable housing through the acquisition, new construction, reconstruction, and rehabilitation of housing. The Capital Magnet Fund awards money to finance affordable housing activities, as well as related economic development activities and community service facilities. “The more than $1 billion disbursed today will help…

FHFA Names Clinton Jones General Counsel

The Federal Housing Finance Agency is getting a new general counsel for the first time since its creation. FHFA announced Monday that Clinton Jones is the new general counsel, replacing Alfred Pollard, who is retiring in March after serving in the role since 2008. He also was general counsel to the agency’s predecessor, the Office of Federal Housing Enterprise Oversight. “Alfred has served admirably as General Counsel to every FHFA Director. I am grateful for his wise counsel, hard work, and dedication to the Agency,” Director Mark Calabria said. “Clinton’s long-standing career in public service, in-depth legal expertise in housing policy, and executive leadership skills will help bolster FHFA’s work as a world-class prudential regulator.”  Jones has served as a…

GSEs To Stay Under Govt Control For Time Being

The Trump Administration announced Thursday that it would not seek to pull Fannie Mae and Freddie Mac out of conservatorship before President Trump leaves office next week.  Instead, the Department of Treasury and the Federal Housing Finance Agency announced amendments to their preferred stock purchase agreements that allows Fannie and Freddie to keep more of their earnings as they continue to work to leave conservatorship. “Today’s agreement that allows Fannie Mae and Freddie Mac to continue retaining earnings is a step in the right direction, but more hard work remains,” FHFA Director Mark Calabria said. “Capital at Fannie Mae and Freddie Mac protects the housing finance system and taxpayers. Retained earnings alone are insufficient to adequately capitalize the Enterprises. Until…

FHFA Seeks Feedback On Appraisal Process

The appraisal process may be headed for a makeover. The Federal Housing Finance Agency on Monday requested input on potential changes to “appraisal-related policies, practices and processes.” FHFA will take the input and decide if changes need to be made to ensure Fannie Mae and Freddie Mac are operating properly when it comes to appraisals. FHFA is seeking input on: Appraisal modernization.The Uniform Appraisal Dataset (UAD) and the design of appraisal forms.Automated Valuation Models (AVMs) and appraisal waivers.Valuation differences by borrower and neighborhood ethnic makeup. “Modernizing the appraisal process has the potential to create a more streamlined and accurate collateral valuation process. But if modernization is not properly adopted, it could have negative unintended consequences,” FHFA Director Mark Calabria said.…

FHFA Extends Multifamily Forbearance Offer

The Federal Housing Finance Agency announced Wednesday that Fannie Mae and Freddie Mac are extending forbearance opportunities to qualifying multifamily property owners through the end of March. The multifamily forbearance program, which had been set to expire at the end of this year, allows property owners with Fannie or Freddie-backed mortgages to enter a new or modified forbearance program if they suffer financial hardship to the Covid-19 pandemic. Property owners who enter into a forbearance agreement must: Inform tenants in writing about tenant protections available during the property owner’s forbearance and repayment periods.Agree not to evict tenants solely for the nonpayment of rent while the property is in forbearance.  Additional tenant protections apply during the repayment periods, including: Giving tenants…

Rule Would Require Living Wills For Fannie, Freddie

The Federal Housing Finance Agency announced a new proposed rule Tuesday that would require Fannie Mae and Freddie Mac to have living wills, similar to what many large financial institutions must file under federal law. Under the proposed rule, Fannie and Freddie will have to demonstrate “how core or important business lines would be maintained to ensure continued support for mortgage finance and stabilize the housing finance system, without extraordinary government support to prevent (Fannie or Freddie) from being placed in receivership, indemnify investors against losses, or fund the resolution of (Fannie or Freddie).” “The rule proposed today is an important step toward a stronger housing finance system. Requiring the Enterprises to develop living wills, helps FHFA fulfill its responsibility…

FHFA Proposes GSE Liquidity Rules

The Federal Housing Finance Agency on Thursday announced a proposed rule on liquidity requirements for Fannie Mae and Freddie Mac, including reporting rules and minimum liquidity and funding. The four liquidity requirements in the proposed rule include: A short-term 30-day requirement that is based on a cumulative net cash outflow analysis, plus an additional $10 billion cushion requirement that must be met by highly liquid assets, like Treasury securities.A 365-day requirement extending the short-term cumulative cash outflow analysis to a full year. Over this intermediate term, Fannie and Freddie may count borrowings against certain fixed income instruments that the Fixed Income Clearing Corporation deems eligible collateral (subject to a haircut), which they cannot count under the 30-day requirement. There is…

Marzol Retires From FHFA

After 20 months on the job, Federal Housing Finance Agency Principal Deputy Director Adolfo Marzol will retire this month, FHFA announced Friday. Chris Bosland, FHFA’s Senior Advisor for Regulation, will succeed Marzol. “After finalizing the Enterprise’s capital rule, a key milestone on the path to responsibly ending the conservatorships, now is the right time for me to transition back into retirement,” Marzol said.    Bosland joined FHFA in 2019 after serving as deputy chief of staff at the U.S. Department of the Treasury’s Office of the Special Inspector General for the Troubled Asset Relief Program. He previously was an attorney in private practice and has served as an economist at the Federal Reserve Bank of New York and as counsel and…

FHFA Extends GSE Loan Purchase Flexibility

The Federal Housing Finance Agency announced Thursday yet another extension of Fannie Mae and Freddie Mac’s ability to purchase some single-family mortgages in forbearance to continue to support the liquidity of mortgage lenders during the pandemic. FHFA originally put the policy in place in April in response to borrowers seeking mortgage forbearance shortly after closing on loans – and before the lender could deliver the loan to Fannie Mae or Freddie Mac. 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. “Eligible loans will continue to be priced to mitigate the heightened risk of loss to the Enterprises from said loans,” FHFA said in…